I have a 5D, a 10D, and an S60 P&S. The 10D now functions simply as a backup to the 5D. I use the 5D when I know I am going out for "serious" photography and when I expect to have time and energy to use it properly (often, but not always, with a tripod.) I try to have the S60 with me most of the rest of the time in case something worth photographing comes up.
For me, the wait between shots is seldom important (I haven't shot sports in about 40 years.) But there are frequently situations when I can get a decent shot with the S60. Much to my surprise, quite a number of the shots from the S60 have been of good enough quality, with careful processing and noise reduction, to include in exhibits (smaller prints than from the 10D, of course.)
Because the S60 is so marginal, it needs all the help it can get to obtain good prints. Thus, I almost always use RAW; and when the S60 eventually quits, I will certainly replace it with another pocketable camera that shoots RAW.
Here are some sample numbers from a six-week trip to Tuscany and Umbria last April and May, before I got the 5D:
Raw images from the 10D: 3201
Raw images from the S60: 1510
Jpgs from the S60: 487
Jpgs from the 10D: 11 (result of accidental setting )
Total images shot: 5209
The percents of these four categories are: 61.5%, 29%, 9%, and much less than 1%. Even without venturing into caves, there were many situations in which it was inconvenient to have the DSLR along.
So yes, I think a good P&S with RAW capability fills a significant need in some serious photographic work, and I hope Canon gets the message.