you were right originally,
Sony has Smart Zoom, (also called EOZ extended optical zoom) which, if you drop down to 10mp (or lower image size), becomes available. It is extended OPTICAL zoom, a sensor crop, no in-camera up-scaling.
you are also right, 10mp images from these cameras are more than enough for most of what we do.
Also available is CIZ, clear image zoom, an in-camera crop combined with in-camera upscaling, to get the crop back up to the full image size. It is available at full 20mp image size, and for smaller image sizes: 10mp, 5mp, etc.
In both cases, the smaller the image size, the more extra zoom you get.
I made an album when rx100 was new, 2-1/2 years ago, of all the various zoom options, here:
http://www.dpreview.com/galleries/9701497431/albums/rx100-extended-optical-and-clear-zoom
view the originals, see the ___x factor, multiply it by 28mm to get the 35mm equiv focal length.
they are handheld (except the amazing vga zoom tripod shot), as that is how I use it.
Quality: good enough for effortless occasional use. If higher IQ is needed for large prints, of course you would use another camera with real optical zoom. If so, you are probably shooting RAW. These extra zooms are Jpeg only.
With effort, you could shoot RAW, do some PP, then crop, then upscale, with similar results, but hardly effortless. Of course, shooting Jpeg to get these extra zooms, you need to 'get it right' when you shoot, more so than RAW which gives more corrective leeway.
IF you only have rx100 with you, (or any camera with extra zoom features) and you see something a bit too far, you would be crazy not to try these zooms, you will be glad you did.
my Oly Stylus 1 zoom, 28mm-300mm optical, offers 2X, which is like Sony's CIZ, and gives in-camera upscale to 600mm.
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Elliott