The image on the LCD is still an... image on an LCD. It doesn't look right, it doesn't feel right. It's not real. LCDs on cameras are all currently extremely low resolution, have poor colour reproduction and contrast. Oh, and they're slow. And it's the same LCD you're supposed to use for the menu system and to review shots.

I appreciate a good LCD and a swivel allows all manner of shooting when you can't put your head behind the camera body. But an LCD doesn't make up for an optical (TTL) viewfinder.

I haven't ever used an LCD yet where one could use manual focus with any appreciable success. I suppose that's changing though with the newer cameras.

The prism and mirror also mean you can use a dedicated auto focus system that doesn't need to use the image sensor. Which means faster and more accurate focusing.

Can a better LCD-only camera be made? Yes, sure. But I'm not aware of any that exist at this time able to compete with even a low-end DSLR.