Most people who buy an entry level DSLR never remove the kit zoom lens. Nor do they make any use of the optical viewfinder -- as ludicrous as it looks, they hold their Canon Rebel out at arms length, composing and shooting through the LCD using live view.
So now we have a G-series Canon with a wider zoom range standard lens, in a smaller size, lower weight, and at comparable cost. I expect this will end up in every pro and enthusiast photographer's pocket -- but I also wonder if it will cannibalize low-end DSLR sales. I know lots of non-photographers who want a step up in quality, but they hate the large bulky DSLR cameras (even though I think a Rebel is positively tiny.) Now they have another choice, and one that is much easier conceptually to deal with since it has a single attached lens, a built in flash, etc.
I'll certainly be recommending this to family and friends who want better image quality in a smaller, easier package.