I realize the "whippersnappers" want to take a pic of every single stupid meal and every time they see their friends and post it to facebook, but a lot of us older folks have an idea when we want to take pictures, and when that happens we grab the DSLR. But sure, for the kids who have to catalog their ducklipped girlfriends twerking to justin beiber and put it up on instagram with cheesy filters to make it look like it was taken 30 years ago, congrats on this great new toy! I'll still gladly take my DSLR out when I know photo opportunities will occur, and if something is so amazing and I don't have my dslr I'll pull out my silly phone camera and snap the photo and wish I had a real camera.
I get where you're coming from, despite a little bit of exaggeration. My wife, for example, - like many women, carries a purse. In her purse is her iPhone 5, and, also, her Sony RX100 MKII. Before that it was the RX100 MKI. The difference in picture quality isn't close, and the RX100 easily fits in a purse.
Personally, I shoot a 5DIII, but I won't go around saying I carry that in my pocket or anything.
As far as flash goes, honestly - Apple could tell me the flash shoots rainbows and unicorns, but I will NEVER, EVER use a direct-facing flash unless it's daylight (as shadow fill). I look at even these new shots with the dual-LED flash of the 5S and cringe, cringe, cringe.
When Apple has figured out a way for us to bounce flash with an iPhone, they may as well save the few bucks on my iPhone 5S and sell me one without the flash!