Nick:
Once I felt I needed something like that... I got it, and it's been an important camera several times... I think you're right.
Mine (an OlyStylus) is not digital, but it's compact, and goes from 28mm to 100mm (I mean it goes from street to portrait) and it can use ISO3200 film, apart from having a flash I can keep off... Originally I bought it to make it shoot stopped down and with fast shutter speeds with ISO3200 film in dull light, and it's great for that.
As you and others have pointed, these cameras are about being prepared for lots of unexpected and too different things in the smallest and lightest package. I think to some of us it is required gear as you say...
I don't use it as much as my real cameras, not because of the lens (a good shot is a good shot) but because of the bigger pleasure I feel with more mechanical cameras and the control they give, and I don't even carry it "just in case" as much as I carry my OlyXA, but thank God I had it with me a few times, both doing street and surrounded by my family...
What is clear is, to get the same tool, and to get the photographs I got, I would have needed several cameras and lenses or my much bigger DSLR with flash mounted, and maybe because of size and sound, people wouldn't have felt comfortable... At all! I was able to photograph old relatives smiling naturally, as I didn't need to be close, and my camera was tiny and silent. The last time I used it (exactly one year ago) it was my grandmother's 80th birthday, and her older (and only) brother and sister came to visit her for the party: I shot with simple drugstore ISO400 color film, with flash half the times, and made three identical albums for them, as they had not been together for many years... Everybody loved the albums in our family and in their families, and during the party I took all the care I could to make people forget I was interested in getting photographs... But I was VERY interested... It was hard to me to decide avoiding my DSLR... I never had my camera in my hands more than a few seconds, and then after one single shot without exception, back to my pants for some minutes, so I was never "the photographer"... But I was! 🙂 Now two of them have passed away, both on this 2011... Yet I saw them smiling yesterday on my grandmother's album... I couldn't have done it with any other camera I own.
I find that camera my best tool for family/indoors shooting. If it's paid work or if people can see "a photographer" and remain the same, my DSLR doesn't harm, and if all I need is 35mm FOV and no flash, my HexarAF is the best tool, but for natural shots indoors with my loved ones, nothing beats a zoom compact IMO...
Cheers,
Juan