Donny you're out of your element!
Unless there is some tremendous new breakthrough that negates the laws of physics... you only get to pick two.
If you want amazing DR and ISO performance then you have to sacrifice Resolution.
If you want high ISO and Resolution then your DR is really going to suffer.
No, no it does not have to.
The 7D actually has BETTER DR per area of sensor than the 5D2 by a little bit....
From what I've read on DxOMark the 5DII beats the 7D in DR at every ISO level with a final score of 11.9 vs the 7D's 11.7.
What did the 7D give up to achieve it's higher pixel count per square mm while maintaining a high DR, oh yeah ISO quality. Look at the DxOMark Sports Score, this is their criteria...
"Sports Score is based on Low-Light ISO performance (values in ISO index). Low-Light ISO indicates the highest ISO sensitivity to which your camera can be set while maintaining a high quality, low-noise image (based on a Signal-to-Noise-Ratio [SNR] of 30dB, a dynamic range of 9EVs and a color depth of 18bits)."
The 5DII reached 1815 ISO before falling below that quality threshold. The 7D only reached 854 ISO before falling below the same quality threshold.
So yes, the 7D did manage to get close to the 5DII's DR levels and upped the resolution per square mm, but it came at the expense of ISO performance.
I will admit the diffraction limit example wasn't the best... but it was the best I could find in the limited time I had before heading off to watch the Pro Bowl.
Also where are you getting the info that some P&S have a better signal to noise than DSLR? I haven't run across that yet. Not saying that it's not true, but what good is it if the rest of image quality isn't there?