The 4/3rds alliance may not quite have achieved it, but the real potential of this smaller format is to do what the Leica initially did: use and existing image-receptor format to create a new, much more portable and handy to take along image-taking device.
Over the years, as it became more of a bullet-proof, motorized, multi-accessory monster, the 35mm SLR bloated into such 5 or 6 pound, $5 or $6k battleships as the Nikon F5 and numerous only somewhat smaller and cheaper semi-pro bodies. IMHO, while such a large and heavy body delivering such a tiny inch by inch-and-a- half -image may serve certain purposes (covering wars and natural disasters, photos on the moon, Antarctica, or volcano craters, bivouacs in Jungle canopies), they are overkill verging on the absurd for most photographers.
It is important to remember that Olympus created some revolutionary inroads in this trend with the OM system, and not just their earlier fallure with the Pen Ft/Fv. The E300, too, may have been somethining of a mistep. But as people criticize the bulk and weight of the E-1 they tend to forget that this is a ruggedly-built, weather sealed camera and lens system that should more properly be compared to N and C's flagships, or at least the models just below them. Compared to those, I have found it to be a superblyportable--and reasonably-priced--system.
Real innovation--as opposed to endless feature and spec inflation--seems to be poorly rewarded in the camera industry. Somehow, most photographers did not seem to notice that N and C were, for a long time, basically offering smaller than 35mm sensors in warmed-over 35mm film camera bodies, using full size 35mm image-circle lenses. Michael is to be commended on his recognition of the superb photographic tool that Olympus dared to produce in the E-1. He may--unfortunately--have been right about the long term future of 4/3rds. (There were many examples of failed attempts to introduce smaller formats to replace 35mm.)
However, I hope that this will not be the case, and have every intention of using this excellent, handy, and highly portable approach to an image-making system as long as it is available.