The Four Thirds format - i.e. traditional SLRs with smaller sensors was a failure until they pivoted into Micro Four Thirds (EVIL cameras, "electronic viewfinder interchangeable lens"). The cost advantages of four thirds sensors never materialized, and the smaller sensor size is only a marginal advantage when it comes to integrating into smaller devices.
This is evidenced by the fact that a mere year after the launch of the first Micro Four Thirds cameras, Sony has already hit the market with the same concept, but they're doing it with a larger APS-C sensor (and also no bigger than the E-PX and GF-X series of Micro Four Thirds cameras).
Olympus and Panasonic rightly deserve the credit for inventing the entire concept of EVIL and bringing it to market, but IMHO it has little to do with the Four Thirds format. That whole thing was a bad idea to begin with. APS-C sensors are widely available and commoditized, so there are no cost advantages, and there is not necessarily a significant technical advantage either.
As for whether there is nothing worthwhile in their smaller sensors, well, time will tell. Today, there is no MFT-competitor (Sony, Samsung) lens with Aperture below F2.8. That's pretty half-hearted competition.
What Olympus did was exactly the opposite of the article - they gave themselves the ability to make lenses that were much smaller and cheaper, or much more ambitious in performance for the same size/cost - by gambling that semiconductor progress would make smaller sensors just as efficient as large ones.
Olympus and Panasonic have made a lot of money selling four-thirds format cameras, for advantages quite unrelated to sensor cost. These two companies carved an entirely new market segment (very small high-quality-sensor exchangeable lens cameras). Previously there was no exchangeable lens digital camera that was both small and optically (sensor and lenses) high quality. What's more, in the traditional segments Olympus was a bit player with sales very disapponting compared to the Canon juggernaut. So this story is much more about an old player deciding to play an entirely different game rather than just keep getting the stuffing beat out of them by just going along competing directly.
They've done well enough that other players (Sony, Samsung) are jumping in and trying to pitch their own mirrorless formats to try to win a piece of this new market segment. There is speculation Nikon and Canon will try as well.