As an owner/lover of the first M, I don't think a lack of color options is what hurt the line in the US. The slow autofocus that was largely addressed in the 2.x update was the main culprit. The other was the initial price. I know that once the price hit $300-$350 for the body with the 22mm lens, they started flying off the shelf here.
So, take a new version, add the dual pixel AF from the 70D, and I think you have a winner. Obviously adding a longer telephoto lens would be welcome, but honestly, with the EF mount adapter, I don't see the lack of a longer EF-M telephoto as too much of a drawback.
The bigger issue is that Canon USA apparently has no confidence in the line, which is the only logical explanation as to why they aren't selling the EF-M 11-22 lens here in the states. Which is a shame, because I picked one up a couple of weeks ago, and that lens, paired with the M body, makes a great travel/landscape/architecture combination that is both powerful and light.