Well, a couple of reasons really...
1. A DSLR is big and you don't always want to carry it around all day, especially on vacation or at events.
2. There are times when a DSLR is very obtrusive, especially when you want to capture candid shots or capture mood.
3. In some places, carrying a DSLR around your neck is advertising your wealth, so a compact stuffed in your pocket is unobtrusive.
So I got myself a Nikon P7100.
1. I already own a Nikon system so the flashguns I own will fit the new camera.
2. It is one of the best compact cameras around featuring good image quality, good zoom lens range and a tilt screen for awkward-to-shoot subjects.
3. Although it is a compact camera, it has manual controls and a viewfinder as well as a LCD screen.
So I hope it works out. I'll let you know over the coming months.
PS. There is a page on this website TAVISTOCK MARKET about spending an afternoon shooting with a compact camera.