The point of a larger sensor is not to get more pixels. It's to get better image quality.
The no of pixels is just to give an indication of the quality, although in reality it's just one factor in overall image quality (others being actual pixel size, noise, etc).
I don't regard image quality as a lost cause.
As in the film days, when large format quality trounced medium format which trounced 35 mm, in the digital age, size still matters for image quality.
The trick is to optimise quality with other parameters (weight, speed of lenses, speed of use, etc).
Medium format quality in a 35 mm size body is an enticing proposition. The problem, though, is getting the buy-in from pros. One can assume that pros have already got a stable of Hassy, Mamiya or other lenses, and are well familiar with the use of existing MF cameras.
Thus asking them to invest in a completely new system is going to be difficult.
Hence Leica is being astute by targetting the 35 mm pros who may not have large investments in Hassy, etc. A camera the size of a 1D but with much better image quality than 35 mm DSLR may be just the thing to pros who are undecided on getting into MF.