The category is defined by what it removes. No interchangeable lenses, no exposure decisions demanded of the user, no bag required. The camera handles focus and exposure; the photographer handles pointing and timing. That simplicity was the whole promise from the Kodak Brownie onward.
Smartphones very nearly ended the category in the 2010s by being better at the same job while also being phones. Compact sales collapsed. What has driven the recent revival is not image quality but everything around it — a device that takes photographs and does nothing else has no notifications, no feed, and no temptation to edit and post before the moment has finished happening.
The trade-offs remain real. Small sensors mean more noise in low light and deeper depth of field, and a fixed lens means composing with your feet. For a camera whose actual competition is the one you left at home, those are reasonable prices — which is the reasoning behind pocket companions like Oneira, built to be carried daily rather than to win a specification comparison.