To your eye yes. But put it into context:
1. You can't put that in your pocket. You need a bag or it's banging around hanging from a sling with a protruding lens (not great). So it's not compact anymore at all.
2. You still have to hold and control that lens with your 2nd hand. But you have to control the LCD with a hand too. The length of the lens isn't saving you any space. It's still a long lens that requires you to hold it and hold the camera. It's not like the EF-S version is heavy, those lenses are super light weight plastic.
3. Yet another lens that can only ever be used with your EOS-M. Not an issue if this is your only camera. But I think it's a massive disadvantage to buy such an expensive piece of entry glass for a compact system that renders it not compact, and cannot be used on your other EOS systems (assuming you have them). The true benefit of the `M in my eyes is that it can share lenses that you already have, or will have. And that it's not just another system to have to get the same lens over and over in different mount formats.
To me, the EOS-M's strength is that it's a compact interchangeable mirrorless camera with a really good 22mm F2 pancake lens. It still fits in my pocket this way. So it's compact enough for that. The strength that lead me to this purchase, over getting a much better mirrorless option (as the EOS-M is not even close to being one of the better mirrorless cameras) is that I can use my EF-S & EF lenses with it, making it instantly able to just be one more tool in the bag, a 2nd body, that doesn't take up the room of a full on gripped SLR, yet can share lenses. So it can go from pocket-compact to hooked up to a serious piece of kit without any trouble.
Personally I would never use the EOS-M as a primary camera. It's focus is too slow. It's a good still life, landscape, etc, type camera. But it's not good for active, moving stuff, at all. The autofocus system is quite painful. I often manually focus with it because I'm frankly faster. But I still love this little camera because it's little, and has the ability to use powerful fast primes. The pancake 22 is the reason I have the EOS-M. If it were not for that lens, I'd have no reason to have this camera honestly, because it's not compact anymore the moment I am not using a pancake lens. If that were the case, I'd have gotten the SL1, as it's better in every way the moment you're not able to put it in your pocket.
Just the thoughts of an EOS-M owner/shooter.