I'm still a bit confused by Canon's strategy - they release the G1X, a large sensor compact with a non-removable lens and a plethora of manual controls, and then a mirrorless with basic P&S-esque handling, but interchangeable lenses and better IQ.
Glad I'm not the only one. This seems exactly backwards to me--a "compact" "point-and-shoot" that is both larger and has more manual controls than a MILC (mirrorless interchangeable lens camera). Further, the compact point-and-shoot has a view finder and a vari-angle LCD, both of which the MILC lacks.
Seems to me that an EOS M body with a G1 X sensor and lens would make a good step up from an S100. (Personally, if such a camera had existed, I would've bought it instead of the Sony RX100.) And a G1 X body with an EOS M (APS-C) sensor and lens mount would make a good competitor to, say, an Olympus E-M5.
Further, if -- and yes, this is a big "if" -- Canon continues to rely primarily on their EF lenses (read: they only release as many EOS M lenses as there are EF-S lenses), the small EOS M body will lose much of its size advantage (just like the NEX cameras do when you put a big lens on them) so you might as well go with a slightly larger body anyway. (To use myself as an example again, this is why I bought the RX100 instead of a Panasonic GX1 (which is roughly the size of the EOS M), despite owning a Panasonic GH2 and a bunch of m4/3 glass--i.e. the GX1 is only pocketable with a few select lenses. (Granted, one of which is the 20mm f1.7 which is very similar to the Canon 22mm f2 pancake.) Anything larger and I might as well carry the GH2.)
Also, as pictured in previous posts in this thread (granted, facetiously, but still), having an external flash isn't going to help much once you mount a sufficiently large EF lens in front of it.
P.S. re: "I think it will serve well as a lens cap." -- wow, you can afford $1,000 for a lens cap?