There seems to be some competition to create the 'smallest camera'. I'm unconvinced that that's critically important - while it's a smaller thing to carry it doesn't seem to greatly improve the convenience as there's still no obvious way to carry the camera without losing it, or to prevent damage when plugged into a phone. The case you mention seems more of an acknowledgement that there's a problem than a serious attempt to solve it.
Engineering is usually a compromise, though. I'd be interested to hear of any disadvantages - or, indeed, advantages - that occur as a result of this choice.