It's functions is annoying and especially with larger lenses than... Even the 22mm.
What functions are annoying? I can tell you right now for street photography I enjoy using the M more then a DSLR. I didn't think I would like the touch screen UI and bought the M because of the $299 deal, and reluctantly at that because of the negative reviews. Now you couldn't pry it from me. I love being able to touch select AF points, love live view exposure simulation, and I find I like the touch screen. And while I would add a dial or two and tweak the UI if I could, overall I find it to be fluid and easy to use. Oh yeah...at least with single point AF set to the AE lock button rather then the shutter, I find AF to be quick, sure, and accurate, and the overall shooting experience to be responsive.
It certainly doesn't replace a DSLR for everything. And I do think larger lenses are awkward on it. But the EF-M 18-55 is well balanced and Canon's smaller EF primes also work well.
You don't find it cumbersome/awkward? One of the reasons why people like FF is the size and grip feel in the hands etc. You put a nice tele lens or even a 24-70mm on a FF and it feels right.
And it's heavy. For some lenses and types of photography I absolutely want a DSLR with a viewfinder and the camera braced against my face. For other types I'm thrilled with the small, light M.
Better sensor than the 7D, okay. Still that doesn't mean much of anything. How many cameras have a better sensor than the 7D?
Out of the history of DSLRs? Not many. Like the 7D the M will pull off a 24" fine art landscape print at low/mid ISO and still produce good 8x10's and even 13x19's at ISO 3200. It's better then the 7D at high ISO, especially shooting JPEGs.
The fact that you can buy an adapter and use your other canon and canon mount lenses is cool... But why is my question. If they could make a 24-70mm or even an 18-55mm pancake, then ill sell all my gear and jump for it.
The existing 18-55 IS is small, light, and offers very good IQ. The only reason I think I would upgrade is if Canon offered a faster or constant aperture version.
The M is a very competent camera and I'm enjoying it so much for some types of photography that I added the 18-55, a flash, and will be adding the 11-22.