I agree with your first statement. Within the range of 3:2 to 1:1 it doesn't matter to me - I compose and print for the subject. Square may on average make less optimal use of the sensor than a rectangle, unless you're a photographer who happens to make mostly square photographs.
As resolution of cameras increases, format seems to be less of a concern.
A few years ago ephotographers that came from a 4:3 or 4:5 ratio, especially for verticals, strongly disliked a 2:3 ration of 35mm. Today I see less and less of that, I guess because cropping is easier due to higher resolution.
For commercial work, it seems that there is less talk about format then ever, or if there is client instruction it usually is shoot both, especially since the web is mostly a wide screen page.
I believe in a few years nobody will talk about camera format, because even today the only format my clients see is the size of a 24" or 30" monitor. Digital has changed how we perceive high quality imagery, how we proof and how we purpose the final image.
In a room full of people all staring at the monitor nobody has ever asked me is that 2:3 or 4:3?
But getting back to the Leica. I think they should just continue on with the M. It's a quirky specialty camera, has some great benefits, some some not so great, but it's unique in it's own way, down to the baseplate and the beauty of the camera is in it's simplicity.
I would hate to see it redesigned to coolpix style or worse a form factor of a video camera. Not for nostalgia but just for usability. If you've ever used a Canon xha1 video camera with it's dozen of combinations of manual knobs, push button controls combined with a complicated menu system you would think that picking up a Leica is a breath of fresh air.
But if this thread, resulting from Michael's article on Leica, is about the future of Leica, I think the one stumbling block of Leica (and all specialty) camera makers is the price relative to their Japanese competition.
It's been like this since the first 1ds and seems to continue. Even Panasonic and others have taken the 4/3's format into the Leica M territory with more features, less price.
From a professional, earn a living at photography standpoint, the only defining need for a camera is client expectations and right now the world of professional photography is in a transitional state, mostly because all traditional media is in a transitional state.
If Leica, or any specialty camera company is to thrive in today's world, the camera has to fill a needed niche. In a lot of ways I think the M series does this, the new S series I'm less sure of. In fact I find the S camera a confusing move by Leica, because it's an expensive medium format alternative in a world where medium format is about 4 current different frame sizes already and seems to be covered by the price point by two established companies.
But if the whole excersize of this thread is to offer Leica advice, the first thing I would say is make the cameras very robust, make the software stable and always offer a tethering solution regardless of camera format.
Last week we were shooting a celeb editorial and went from the Canons to the Leica for one set up. As I shot the room just fell silent because nobody but me could see. Now it wasn't a deal breaker and I only shot a small amount with the m-8, but the standard in most professional photography is to have every camera hooked up to a large monitor for review as once again the monitor is the camera format.
Then again even in the world of photos for money, not everything has to be hard edged, serious business, (though we do work in a hard, serious business), there is also a little wiggle room for fun.
If shooting a Leica is fun then it's probably worth the price.
In fact there is nothing wrong with having some fun. I was speaking to a publisher Friday night and we kind of came to the conclusion that the world is way too serious about everything and maybe we should every now and then open up and just do something that makes us smile.
Personally "I think" I see a historical look from my M-8 but that could easily be wishful thinking or just a romantic view of the past. Still there is something refreshing about a mechanical camera in today's touch screen world.
The Leica makes me smile.