Rethinking digital camera sensor sizes

I just now realized that the case of small compact digital camera sensors is even worse than I thought. The measurements 1/2.5 inch, 1/1.8 inch and so on refer to the diameter of the imaging circle. The diagonal length of the sensor is less than this, typically 2/3 of the diameter of the imaging circle.

A nice reference on the sensor sizes is a Wikipedia article, and Dpreview makes sense of the measurements.

Taking this into account, the typical surface area of a compact sensor is about 25 square millimeters. And the digital SLR have sensors with a area of 225 to 864 square millimeters, that is 10-30 times bigger. Thus the image quality is much better. The big question is why these sensors are not used in compact cameras. The 4/3 sensor would be excellent for this.