Actually you can tell the difference of a 4k video and a 1080p video, even with a smaller sensor. The problem is youtube does not show you what it looks like in a good way, they have compression and so on. But if you download these clips and check them out, remember you need a fast computer to view it, or good graphics card that supports hardware acceleration. But you can tell that 4k is just amazing for scenery shots, big wide shots etc. When you are shooting things close up, 4k does not do anything I think, no big deal. But for these wide outside view, incredible. And if you view it on a computer screen you can tell how good it looks, you do not need a 4k TV.
Go to end of page and download the sample clips !
http://www.photographyblog.com/reviews/panasonic_lumix_dmc_lx100_review/sample_images/
That is from a micro four thirds sensor, or a "1 inch sensor" as they are more or less same in size. I think that this is probably the limit of what a action camera can use in terms of sensor size, power consumption, size of the camera, the lens etc. Larger than that and there will be issues with how big the camera is and how much power it will need to record a decent length of time. This issue is less of a problem for a dashcam as they are (at least in cars) powered from the car when running. And you could have a camera like the mobius where you can separate the lens and sensor, and install the camera hardware in another position or box, so you only have the tiny cameras for picking up video and sending it to the unit. This is not possible with a dedicated action cam as it will be one unit in it self, just like a DSLR camera. And even the DSRL cameras have issues with 4k video, battery life, focus problems and so on.
Z-CAMERA E1
A nice camera, but way to many problems, I would consider buying that to get 4k with a large sensor, but only if it had a fixed lens and focus, otherwise I could just get a DSLR, plus that camera is expensive so is it justified, I would say no as you can get a DSLR that will give you much more for your money. Just like dedicated video cameras have been pushed back by the popularity of DSLR. If a action camera is to expensive it will not sell, so what is the point of bringing a product like that to the market. Does not make sense business wise.
Z-CAMERA E1 is a professional camera intended for a specific market, might work, but for the home user, naaaa, to expensive, better with 4k gopro or something else.