That picture is with the Olympus kit lens in it's "closed" position. Once you open it to actually use it, it's as long as the Sony or Panasonic lens. Sony's kit lens is made of metal to boot.
And while the Olympus might have IS in body, it also has a 2X crop sensor, which is a huge disadvantage when your primary purpose for the camera is to shoot wide-angle interiors. To get the same 24mm wide-angle that the Sony 16mm pancake gives you, you would need a 12mm lens on the Olympus (which doesn't exist). And the Olympus 9-18mm costs more than the entire Sony kit.
But isn't that the whole point of the folding lens in the first place? So that you have a smaller camera when you need to store it? The Sony doesn't give you the option to collapse the kit lens when you want to stick it in a bag or something, so it becomes obtrusive.
As far as the rest goes, I don't think the slightly smaller sensor is as big of an issue as you make it out to be. Keep in mind that the Sony has a 1.52x crop sensor, which isn't a ton better. To be honest, I've shot interiors before, and 24mm is often not wide enough. When I shoot interiors, I am most often shooting in the 17-20mm range on my 5D. The Olympus at least gives you the option of buying a ultrawide-angle lens, which isn't actually priced too badly at $469. On the other hand, Sony does not make any lenses wider than 16mm (24mm equiv) for the NEX line, so you have to buy a $200 Alpha to E mount adapter (in addition to the cost of an ultrawide angle lens) just to get true ultra wide angle on a NEX 3.
For me, the biggest issue with the Sony is the lack of a built in flash and the lack of a hot-shoe. That, in my opinion, is a greater deficiency than the slightly smaller sensor on the E-P1 because you cannot use a full size external flash with the NEX-3 no matter how much you're willing to pay. Leave it up to Sony to create yet another proprietary flash interface that's compatible with only ONE flash on the market today (and a small/weak one at that).
I'm not trying to claim that one is inherently better than the other, but rather pointing out that both have advantages and disadvantages.
-Olympus Advantages: Cheaper, IS built in, more lenses to choose from, flash hot-shoe, built in flash, wireless flash commander
-Sony Advantages: Bigger sensor, tilting screen, better LCD screen