Once you have used a digital SLR (DSLR) with a nice, clean, large, low-noise sensor, the poor image quality of most compact digicams becomes hard to tolerate. This is in contrast with film, where a $70 Olympus Stylus Epic can compete in image quality with thousand-dollar cameras.
Then it hit me: don’t consider a pocket digicam as a camera, think of it as a pocket photocopier/scanner instead, like HP’s ill-fated CapShare. I use my pocket digicam mostly to record specials in stores, flyers, magazine articles, diagrams on a whiteboard and the like. Japanese otaku teenagers are way ahead of me, as many bookstores in Tokyo now ban cameraphones because the kids would just snap photos of manga comic books and not pay.
A 5 megapixel digicam, pretty mainstream nowadays, with a 4:3 aspect ratio can “scan” a standard US Letter or A4 page at an approximate resolution of 240 spi. This is significantly better than a fax, which scans at 150 spi. Many pocket digicams have lenses that are serviceable in macro mode. The limiting factor is probably setting up the camera, as you can’t find portable copy stand like the vintage Leica BOOWU (also shown top left in this outfit photo).