It looks to me like the 4:3 format has a lot of merit in it.
That won't win you many friends!
I think in the long term you're right but at present people seem to get hung up on the downsides of a small(ish) sensor without noticing the upsides.
In practice, so far all that has been achieved is to push Olympus and Panasonic into producing some designed-for-4/3 lenses which are very high quality - which is relatively easy to do because of the small sensor, but OTOH they need to be good because of the higher image magnification (in the end product, eg a print).
Which wins out - the ease with which very good lenses can be produced for a smaller image target, or the necessity for such lenses to be more than just 'very good' - I don't know.