Don't get me wrong, I don't think the image sensor size is as important as people like to think it is in terms of image quality. I'm sure technology will provide even better image quality with smaller sizes (for whatever reason) if that is what to do in the future. That isn't the issue. The wide angle lens thing is the issue and Nikon certainly hasn't stopped making wide angle lenses even though they have stopped making 35mm cameras.
Peanuts, I know how Nikon hates change as strongly as Canon embraces it. But recently they have been making all kinds of incompatible products. G lenses don't have aperture rings and won't work on the FM2 which was just discontinued this month. The new D40 wants AF-S motors on the lenses since it lacks a focusing motor in-body. My D80 needs a CPU lens to boot so I can't use pre AF lenses with it.
Just a handful of years ago, you had to search far and wide to find a combination of Nikon and Nikkor that weren't compatible with one another. Not so today.
I would bet they have changed their mind. I don't doubt they consider it unimportant product-wise to have a 35mm sensor. But peoples' perceptions are what they are and the wide angle lens issue is very real and would have kept me from buying another Nikon after 40 years as a Nikon shooter, if I had known there would be an alternative when I went digital in the first place. They have to compete and I think they will.
I would bet the cost of the sensor is not the issue. You can get little 10mp sensors on point and shoot cameras that lead me to believe a sensor can't cost the manufacturer more than $10 or so. I would bet Nikon is actually trying to make camera systems smaller than they were in the 35mm days. Whether that is true or even a good idea is way beyong me but it just "feels" that way to me.
Let me give you an example. When I bought my D50, I bought a cheap little Chinese 55-200 Nikkor lens to go with it. It turned out to be a poor lens and I later replaced it with the 70-200 f2.8. The difference in size and weight between these two lenses is breathtaking and much of the difference is due to the size of the required image circle. Yes the cheap one is slow etc.etc. but the difference is really remarkable. If I could get a good quality telephoto zoom close to the size and weight of the cheapie, I would jump on it. Making cameras smaller helps.
If Nikon is going to stick to their guns on the sensor size, then it is time for them to realease some high quality wide angle lenses for the small sensor. Otherwise, let's get the D3 rolling.