Is it possible to redirect print streams to debugger in Atmel system?
You can output messages and values to the output window with Atmel Studio 7 (it might work with other versions but I am running version 7.0.1006 and using Atmel ICE) by doing this:


Create a normal breakpoint where you want the output.
Right-click on the breakpoint and select "Actions".
A window will be displayed under the breakpoint line, if the "Actions" checkbox is not already checked, check it by clicking on the checkbox, but it should be because of step 2.
There is a textbox labeled "Log a message to Output Window", type in whatever you want to output. This works with plain text if you just want to display something like "entered function a" or just put whatever value you want in brackets. An example of outputting a variable value: "The value of x is {x}", where x is the variable name. 
If you don't want the execution to stop check "Continue execution" and the program will not actually stop at the breakpoint (like it normally would).


Also, watch out for optimization! You might need to completely turn it off for your debug build to see certain values or states.