The M, a timid release of a half hearted product... Canon could easily make something that would blow our minds and set the camera world on fire, they chose not to. Instead they let Ricoh, Fuji and Sony have some moments of glory. Their fear of harming Rebel sales allows these other brands some sort of safety net. For now I guess.
If canon were smart, they'd make the Rebel line mirrorless. Test the waters by putting it into an already established and popular line. First off, the rebel is already small. Provide adapters for lenses. Bam. Of course this won't happen, but I think eventually Canon will have to answer Sony. Sony won't stop. They are onto something with the A7. The next version of the A7 will be even better. Pretty soon Canon will have a lot of catching up to do if they take their time. True, Sony has its own work to do to get more native lenses for their new system...but with adapters, photographers can use lenses from Canon, Nikon, Leica, voitlander etc...so they actually have more lenses than the big two available.
It also makes sense for Canon to move to mirrorless. Less moving parts. Cheaper faster production.