I really can't answer the question about the quality of cameras out there that don't have the option to shoot raw, but I can tell you that I am a fairly recent convert to the awesomeness of shooting raw.
I bought my first DSLR last August, but kept shooting jpegs until about April. I just didn't *really* see the point of raw--it seemed like a big waste of space and it meant that I HAD to process every single picture I wanted to do anything with; I couldn't just look at the jpeg and decide to leave it the way it was. And honestly, I figured raw was really just for professionals; amateur hacks like me didn't need to bother.
But people here kept saying "shoot raw," "shoot raw," "shoot raw" and giving reasons why. So, I decided to try shooting raw. I will never go back to just jpegs again. The control it gives me over things like wb and exposure alone are well worth any extra processing time. I've still got a LOT to learn about processing--how to batch process to save time, how to achieve better results, and all that--but it's just like learning how to develop your own photos in a darkroom, it takes some time to learn, but it's definitely better than sending them off to a lab and letting someone ELSE control the end result of YOUR photos.
And yes, people were producing beautiful photos back when raw just referred to meat--but they had those little things called "negatives" to work with!