S-Scale is a great product and it has alot going for it. I for one think MTH made a very good move. It will be good not only for the MTH bottom line, but it is also a big plus for those who model these trains. I can't see any logical reason not to happy for our toy train brethren.
As for the charm of 1/64 scale that is and always will be in the eye of the beholder. But, I have to admit with all the wonderful sound systems we enjoy today that air cylinder generated choo-choo of the Post War American Flyer Steam is still hard to beat.