I would agree with you completely about the very diminishing returns to casual or enthusiast photographers of extreme resolution digital because of the cumbersome nature of handling files and processing them in a never ending spiral of complex and time consuming technology wonders. I agree that it does make sense to think about what resolution is really necessary for one's true needs and cameras with 1 inch sensors or older cameras like GXR, RD1, M8 are potentially very desirable for the pleasures of picture taking. I would love to have an M10, but I won't allocate funds for that. The older digital M stuff is scary to me for reasons of longevity and repair expense.(or no repair). That's why I indulge myself with mechanical marvels like Hasselblad or film Leicas (and recently a Leicaflex SL)....which have very convenient storage formats and plenty of MPS if you want (but also drawbacks).
With the M system many of us have investments in glass.....and that's another issue that we want addressed by Leica. Maybe M10 is a shot across our bow on that one.....as it implies true M experience and full use of the glass in form factor we love(A HOly GRAIL). My concern is that even that argument fails as these sensor cameras may require new generations of specifically designed glass to optimize performance. Leica , to it's credit has attempted to stick to simplicity where it can.
I am keeping my jaundiced eye on the smaller sensor and MP limited cams......ugh...even smartphones...that can do so much. If the damn things weren't so quirky, slow, and processing intense.....I"d buy a DP Merrill.
BTW one of the best digital cam systems I've used is Nikon 1....with the old EVF and 12MP. And lots of fun with the Fotodiox NIkon to M adapter.