I have to agree with most of what you guys are saying. From my understanding, most defenders of the small sensor compact have argued that the smaller size results in smaller, lighter, and cheaper cameras. The decrease in size often accompanies an increase in aperture for lenses to partially make up for the difference in sensor size.
Well let's have a look at what Nikon has come out with: despite having a sensor 70% the area of a m4/3 sensor, it is roughly the same size (a little bit smaller, but not enough to make it fit in someone's pockets or anything) and weight, being comparable to a NEX system even. As far as price goes, well you can see for yourself that it is similar or more expensive than other larger sensor mirrorless cameras. Finally, we all can see the lenses are not really all that small (similar to m4/3 lenses of the same type) and are all slow in aperture, event their pancake.
In fact, this is actually expected since the impact the sensor has on size and cost are quite small at the m4/3 size and below: smaller sensor cameras tend to be at the same price point, and are generally the same size for ergonomic reasons. Lens apertures too are also difficult to increase while maintaining good optical performance, even if the coverage is decreased- for reference, the olympus f/2 zooms are similar in size and price to 35FF f/2.8 zooms.
The new mirrorless cameras seem to be targeted to a very low consumer level- this much is evident from the lens selection and the shooting dial itself. I don't necessarily think this is a bad decision on Nikon's part, but it seems they've forgotten how much price is a factor at this level of costumers. With a price point similar to m4/3 and NEX systems, with a smaller set of lenses, and without any tangible benefits, it's hard to see it as being any more than just a novelty.
