I own a NEX 5 and constantly hear the "It's not much smaller than a Rebel" refrain. That's a load of rubbish - it's tiny (and with better IQ than my 7D...):
Problem is, to get it that small, you're stuck with the 16mm pancake.
Or yes, certain MF pancakes and other small lenses if you don't mind MF.
But sticking with AF, there are no pancakes for the NEX's at the moment that have a useful focal length (to me at least). And I would want AF on something small and portable, because the point of having a camera like that IMO is to be able to grab it and snap off a shot if you happen to see something interesting, and AF is usually better at that than MF on these cameras.
Once you want to get a better focal length, you've got quite a wide camera on your hands.