Most DSLR use the APS-C sized sensor which is slightly smaller than Fullframe (the diginal equivalent to 35mm film). Sony NEX and Samsung NX also use the same sensor size.
Olympus/Panasonic chose to use a smaller sensor instead called the four-thirds (4/3) standard. Both the m4/3 and 4/3 use the same 4/3 sensor. The difference between m4/3 and 4/3 is the m4/3 does not use a mirror box (mirrorless), i.e. is is not an SLR system, hence it is smaller.
Because the 4/3 sensor is smaller, it can use smaller lenses and a smaller body, so technically if Oly (and Panny too) has taken advantage of this, their cameras can be smaller and thinner than the NEX (which is currently the smallest DSLR-class camera in the world. Forget about panasonic's GF2 advert. They claim to be the smallest DSLR camera with built-in flash. Marketing gimmick).
The reason why the EPL2 is so big is because Oly packed everything including built-in flash and hot shoe etc into the package. NEX on the other hand give you a portable and elegant external flash system that can be removed when not needed. Their included belt strap came with an attached box to keep it which is real cool.
Apart from EPL2/EP2, which I called the "DSLR-lite" or "DSLR-wannabe" class, I think there is scope for Oly to look into an even lower end market "The premium PnS" class where Sony has positioned the NEX. With smaller sensor, they can offer an even smaller body than the NEX. Take out the non-essential stuff like hot shoe, and swivel LCD and what they can provide would be DSLR-like performance in the body of an LX5. This will make sense to all those auntie and uncles who want quality photos from a PnS without the complexity to mess with aperture, iso, etc.