Few, if any nowdays, will remember the "doom and gloom" when the first 35mm cameras were introduced. Well, how can that rediculously small area of film compare with quality from a 4"X5" sheet film camera, and even the 'compact' (but for amateur) 120 roll film!
Don't look at the Nikon 1 system to compare with DSLRs, compacts, or even other camers. It is instead a new kind of photographic tool. Perhaps an apt discription would be a video capture tool which also saves high quality still images, in addition to high speed motion analysis capture. Think of the possibilities!
Just as 35mm did not completely replace 4X5 or even 120, so go on using your APS-C and FX cameras, the CX is just another option. If you think its not for you, then it probably is not (just like those who use Hasselblads, while others use 35mm). Different tools for different folks. I wish Nikon every success!