Ergonomics will always be tricky with small cameras like these. However, if Canon wants to have a 'budget'-line that is appealing to Joe Average, they will have to reduce size somewhere, to make the camera more pocketable.
With this camera, they may well have shown what the 700D or 750D will look like, reducing the complex mirror setup, and forcing the OVF user to 1-up to the X0D.
As for flash, it's technically very hard (I won't say impossible) to put one in, because if I measure just a 40D, the flash is roughly 10 centimeters above the optical axis, and even that gives shadows pretty fast. With a total height of 66 mm, this camera would have to make its flash pop an extra 6 centimeters above the body to achieve the same effect, which would make it fragile at best. The option of swright might be good, to put a flash in the sides, which would put it on top for portrait mode (where it matters most), giving you an extra inch or so to play with.
Still, the pocketable flash you can buy to it is an OK option in my book. You can save weight/money if you want, or take it with you when you think you might need it. It may also be a nice backup-flash for your big rig, since most of the buyers of this camera will already have invested a lot of money in lenses, and other gear.