First things first: I've gotten many great images out of my m4/3 cameras and continue to use them. Used correctly, an m4/3 camera can deliver excellent images. However, in terms of the deep underlying capabilities of the sensor, the Panasonic sensors are lagging--they have attributes that are similar to sensors a generation or more old and aren't exactly where the should be in the mirrorless competition. For example:
Quantum efficiency
- Nikon 1: 57%
- Olympus E-P3: 41%
- Sony C3: 45%
Minimum Read Noise
- Nikon 1: 6.8e
- Olympus E-P3: 8.1e
- Sony C3: 3.3e
Maximum Electron Capacity (Saturation)
- Nikon 1: 23,644e
- Olympus E-P3: 17,791e
- Sony C3: 21,361e
What this means at the lowest levels of how the sensors work is that the smaller Nikon sensor is performing in ways that the larger Panasonic sensor can't match. That doesn't mean that the Nikon 1 images are better than the Olympus E-P3 images, but it does mean that the smaller camera performs far closer to the larger camera than one would expect. Indeed, the current m4/3 sensors are closer to the smaller Nikon 1 sensors in some underlying performance values than they are to the larger Sony APS sensors.
Time will likely correct such anomalies and even things out so that the sensor performances better match that implied by their size. But as I write this, the Panasonic sensors seem to be lagging in key parameters.