My feeling is that Nikon should have looked at the unmitigated DISASTER that was the APS-C film format...an all-new, proprietary format is a double-edged sword. One side cuts your enemies, and the other side cuts your own flesh and bone. But enough metaphor: Nikon should have gone with the m4/3 format, and used the leverage of Panasonic and Olympus and THEIR fine, fine lenses!!! My personal feeling is that Nikon could have, should have, tried to leverage an already-existing format and lens flange-to-sensor specification, and made a camera that could use all the OTHER m4/3 lenses and lens accessories. That would have been a safer strategy, and would probably have allowed them to gain immediate traction among the already-existing user base. If their cameras, or lenses, proved to be significantly better than competing offerings from Oly or Panny, then Nikon would have easily out-sold those two companies in whatever segment their superiority made their offerings truly compelling.
Part of me thinks that Nikon does not want ANY competition, at ALL, and somehow convinced themselves that their biggest strategic and marketplace advantage would be to attempt to leverage the Nikon F mount and the 60 million F-mount lenses going back to 1959. By making their very own format and flange-to-sensor distance specification, they totally SHUT OUT the lenses made by Panny and Oly and Leica for the m4/3 cameras, effectively creating their "own user base", and not "sharing a user base". I'm sure there is a bean-counter justification report that outlines the brilliance of striking out on one's own, into uncharted territory, without a supporting cast. You know, kind of a three-men-in-a-rocket-ship-let's go-to-da-moon!! type of pioneering spirit. Nikon is a very proud company, prone to creating engineering marvels, and is a company that once took the 35mm SLR from a novelty (Exakta,Asahiflex) with crappy functionality, and created the first true "35mm SLR System Camera" in the Nikon F of 1959, which ran until basically 1972 or so, until the F2 came on the scene...
It's interesting to me though, how the USA did a similar thing....we went to the moon a long time ago ( a MAJOR achievement, for certain), but have never been back...the F System was a major achievement, but it was born out of the same old 35mm film format Leica had established over 25 years earlier. The camera market is global. Sheer unit sales volume of P&S cameras is shrinking, as cell phone cameras get better,and better,and better. I'm not sure that in this new economy, and this stage of technology, that Nikon's new 1-system is going to be all that profitable. If they had made a NIKON m4/3 camera, I think their chances for good sales would have been much higher than with this all-new "everything".