I think systems like Fuji's X-mount and Olympus' OMD series and well spec'd items like Sony's a6000 are going to be very DISRUPTIVE in the entry-level DSLR market once people catch on.
Real SLRs will remain a strong market for various virtues, real and imagined, including better handling with large lenses. But once you get to really large lenses it matters less as you support the lens more than the camera anyway. Performance becomes more of a factor and, at least until now, SLRs have held the lead.
But some new cameras, like the 'EM1 and the new XT1, have not only good performance and IQ but also have ergonomics that's well suited to handling larger lenses PLUS they share a mount with much smaller bodies and lenses. This larger ecosystem is already in place for such models and is only a bit of marketing education away from storming low end and enthusiast DSLR sales.
Performance and IQ of these new ML cameras is not appreciably lagging any crop-body SLR!
Perhaps it was Canon's strategy to produce a lacklustre MILC to taint the concept and create marketing roadblocks for their competitors?
I really like small DSLRs like Rebels, Nikon's 5000 and 3000 series and such, but the fit and feel of the EM1 and other ML bodies is similarly good and may be a natural alternative for those who don't want dinky little shapes like the M to work with. But if you DO, and if you bought an EM1, you have Pen series alternatives. Got and XT1 but want something smaller?... xe2, xm1, xa1.
So Canon's decisions may certainly be making them money, while the likes of Fuji's attitudes towards their customers is earning plenty of respect and the utility and performance of the EM1 is making similar inroads into positive customer mindshare. Don't underestimate the underdog market appeal.
There's a lot of good choices out there, but I think Canon is gambling a bit much with the M's shortcomings for the sake of profits and losing MILC ground to the competition. At least for now.