I can see how that would be great for taking pictures at airports and major crowded events -- especially if one is black or middle-eastern...
Seriously, what would the improvement be? It would be tedious to hold pistol-like, and more shaky than current designs. And it's not like it hasn't been tried (e.g. old 8mm film cameras were like that).
>As has been cited elsewhere in this thread, smaller glass with higher density sensors is not a long term solution.
It has already eclipsed bigger glass. And not just smaller glass, but the tiny kind of glass in mobile phones (sub 1").
For most people, that's it, and bigger glass is only for specialists and enthusiasts (trucks vs cars -- for most people the mobile camera is their car, and pro cameras are trucks for limited people).
And of course it's only gonna get better -- an major mobile phone with like 1" sensors (plus all the processing advancements inside due to the crazily better than even a pro DSLR/mirroless processor) gonna wipe out what's remaining from the compact market too.