Oh FFS, the context I'm talking about was a shunt regulator.
The OP has already pointed out the current would be much higher with a 25V input, and he cannot tolerate the drop over a linear regulator at 5V input.
BTW, the current in the OP's current calcs for a 25V input to a 5V shunt regulator would not be 50mA, but 40mA with a 500R resistor: => 20V drop over 500ohms.
20V x 20V / 500 = 800mW, certainly not as bad as the OP's original 1.25W, but still requires a meaty R to dissipate the heat.
So put 3 or four smaller R's in parallel to spread the heat.
However, the original calculation of 500 ohms is seriously flawed.
For sure you'll get 10mA with 5V across 500R, leaving NO VOLTS INTO THE MCU!
So make it 50 ohms = 0.5V drop @ 10mA, but 400mA at 25V input
That's now 8W in the series R.
- SHUNT IS NOT GOOD FOR WIDE INPUT RANGE -
The LDO is a possible answer, but not the only one.
http://www.national.com/ds/LP/LP2954.pdf shows a reasonable dropout voltage, best you could probably hope for, but pay due caution to the stability requirements in the DS.
And yes I'll grant you 200mW for a LDO voltage regulator.
At the end of the day it is the OP's choice which way he goes.
If he truly desires 5V at 5V in, a SMPS is the only way out.