Why does everyone assume Nikon and Canon will dominate the mirrorless market if they produce cameras with similar size sensors? They dominate the DSLR market simply because they got there first. Maybe they realize that they're already too far behind Olympus and Panasonic in this new market to make up lost ground, hence the need for creative new sensor sizes. Sony have already proven that APS-C doesn't work in this division by virtue of the lenses being too big. I think :43: is proving to be a real thorn in the side to the two "big" players.Richard... yes. It's looking like m4/3 is "just right" for a lot of applications and your analogy is right on.
Jonathan... it would be awesome if Canon bettered Sony and pulled off an APS-C system with smaller (and more) lenses than Sony has. Who knows... they could create a new sensor size somewhere between APS-C and m4/3 and apply their considerable engineering prowess and financial resources to such an endeavor and simply SMOKE in the compact mirrorless segment. If they're visionary, they might willingly sacrifice their current entry-level APS-C segment at the altar of the future.
Competition for m4/3 is a very good thing. I think Nikon tripped on it's sword. I had hoped it too would have been a NEX killer with better lens options. But at present, that's not to be. Their sacrifice of IQ for smaller size lost me from the get go. But they may do very well with the amateur P&S segment who thinks their small interchangeable lens system is a big deal.
I'm very happy with m4/3 and increasingly so with every new lens and body release, but do look with interest toward forthcoming Canon and Nikon mirrorless systems. So far, anyway, m4/3 continues to be a smashing home run in the mirrorless segment.