I think there is room for everyone and their needs.
Many are finding joy with small cameras as a 2nd 'encumbrance free' system that meets 90% of needs.
The road to success is not just 135 format FF.
Oly and Pentax may well have gone the way of the dodo if they went FF early (and Pentax nearly did with the MZ-D before anyone else way back in 2000 )
Contax went ahead with the Contax N with the same Kodak sensor as the Pentax and is no more.
Kodak forged ahead with its DCS Pro, and is in shambles.
I do think Canon was the one at the right place and time with its ability to leverage on its confluence of tech (optics/electronics/imaging know-how/sensor tech) that it had at hand in the early days of digital to move into the position that it has today.
The optics based companies have struggled up the digital steps as they were mainly (optical/mechanical based).
Even Nikon has only found 2nd place after quite a long struggle thru digital (and that is before anyone else stepped onto the stand)
If Sony had acquired Minolta just 2-3yrs earlier and pushed the digital bounds with its electronics might the position of #2 may well have been different.
No surprise that a lot of good/serious/professional photographers are basically finding that the current 'smallish' format cameras today are giving good enough o/p for 90% of needs.
Just love Kirk Tuck (Good writing and long winded

, with lots to say on the thoughts of phototaking rather than just about gear and he's and avid swimmer too )
The Visual Science Lab / Kirk Tuck: Thinking about gear made me think about gear.
Steve Huff for his 'real world' camera reviews, love for cameras and rather straight thoughts on the cameras he uses (which like many of us, no straight best camera)
Mirrorless Mania – Which one should I buy? Nikon 1, Micro 4/3, Sony NEX | STEVE HUFF PHOTOS