Thirty years ago, as much as camera technology had already advanced, the vast majority of cameras were of solid form - no lighter than a typical DSLR of today. Yes, there were possibilities to get smaller bodies. And I soon realized that a "compact" camera that I could attach to my belt was essential to capture any photo except those that were planned before going out onto the street. These days, there is no excuse for not having some camera at hand all the time (well almost).
This means that whenever a photo possibility appears, there is a good chance you can capture it. You can respond to the opportunities of unusual lighting, rare occurrences, candid behavior as well as more common subjects that can be missed if more conventional gear has to be carried around.
The majority of digital cameras today are phone cameras and their quality is always improving. However their limitation of small sensor size and lack of optical zoom mean that they cannot match the performance of any except the very lowest end compact digital cameras - particularly in low light. So logically, if you want mobility and availability coupled with good image quality, a small compact digital is the choice. Personally, I go around with such a small camera on my belt - wherever I go. This enables me to capture shots at close quarters, on the move, unobtrusively, on short subject notice.