I am a professional photographer who loves small P&S cameras, my favorite being the Contax T3.
I have used multiple Canon S70, G9, G10 and S95 to shoot catalogs, magazine covers and a huge portion of my personal projects.
While I was able to make good images using these small cameras and I in fact earned thousands and thousands if not tens of thousands of dollars using these P&S cameras, at this point in time I wish I had been able to use a compact camera with a bigger sensor. The P&S images simply lack dynamic range, high ISO capability and there is essentially no control over DOF.
Even the MFT sensor in my Panasonic GF1leaves me wanting for more.
In terms of ISO, I never shot the S70 or G9 above the base ISO as anything above that looked horrible. The S95 I allow to creep a little higher. Even the GF1 above 800 is terrible. I say this despite the fact that I love these cameras.
While I do have an iPhone 5 I do not consider it to be a serious camera under any circumstances other than an emergency. That said I use it's camera daily, specially for images I plan on emailing or using on Instagram.
At this point in time I believe the Nikon A is the best camera for my needs (large sensor, flash, wide angle lens... as I don't care about zooms, flip screens or viewfinders).
If Canon releases a simple, straightforward APS version of something like an S110 without purposely crippling it in fear of it's dSLR sales it would hopefully be a very tempting camera.