Why on earth do camera makers not change to this simple use of diagonal size in mm which is right there on the sensor maker's spec. sheets? Is it fear that folks in backwards, non-metric system countries (just Myanmar, Liberia and the USA last time I checked) will find measures like 8mm harder to understand than weird and inaccurate measures like 1/2.3" ?
I suspect that manufacturers are happy to continue with this archaic method of describing sensor size to ensure that most buyers of P&S cameras remain ignorant about the actual size of the sensor in their P&S camera. If the issue of size is obfuscated, then the customer will be less concerned with the fact that size really does matter when it comes to a camera's sensor, if image quality is a concern.
The typical pocketable P&S is 1/2.7" format size with a sensor diagonal of 6.72mm. The larger variety of P&S, the 2/3" format, has a diagonal of 11mm. The difference between these two formats is equivalent to the difference between the Canon cropped format DSLR, such as the 50D, and the full frame 35mm format such as the Canon 5D. The crop factor is approximately 1.6x in each case.