We could have a lot of fun in this scale:
GI Joe - Little green army meen that can be posed. Joe vehicles could be true-scale instead of Joe-scale. Epic battles could be played out. (sadly, still no Flagg, since it would still be about 15' unless underscaled a great deal)
Now imagine the movie/comic tie-ins:
Jurassic Whateversnext - 1" articulated figures with in-scale vehicles and dinos. A $40 price point in this scale could give you a couple figures, a large dino or a couple smaller dinos, maybe a helicopter or jeep, and a basic shell base. Add $10 to the price, and the base can have action features or interact with the figures.
Transformers - These guys are nearly perfect for the current Deluxe and Voyager crop, so next movie, throw some of these guys in the mix to give the human counterparts.
Star Wars - Hoth Battle with AT-AT and Snow Speeders, Battle of Endor with Ewok Village and Shield Generator, Clone Wars, all the big battles from the movies, with all the characters involved (maybe some statue-figures for lesser-known characters who didn't do much, but can't just be 'painted humanoid', like Yak-Face), Death Star Showdown... just so much...
Marvel -
The X-Mansion, with Danger Room;
a heli-carrier that's not woefully undersized (it'd still be undersized, but not as bad as the attempt we were already given);
Captain America's Railroad Escape - OO or S gauge (close enough at 1:76 or 1:64, respectively) train set with Cap, Bucky, some Nazis, an exploding bridge, all sorts of goodness;
Stark Tower with all sorts of gimmicks built in, including the armor room with all of the Iron-Man armors;
Spider-Man's New York Showdown, a portion of a city block, a la TMNT's playsets, with action features for Spidey to fight Doc Ock, Sandman, etc.;
GotG - The Milano
All the Disney movies -
Princess playsets to appeal to girls - castles that look like the ones from the movies
Adventure sets to appeal to everyone - climactic scenes from various movies
And much, much more