Don't know if they have any plans to develop this commercially, but Canon has developed a huge 120MP sensor:
Canon has announced it has developed a 120 megapixel 29.2 x 20.2mm APS-H CMOS sensor - the same size used in its EOS-1D series of professional DSLRs. The sensor, for which Canon has announced no production plans, has a pixel count nearly 7.5 times larger than the company's highest pixel count commercially available sensor. It offers full HD recording (using 1/60th of its surface area) and can deliver 9.5fps continuous shooting. This follows a 50 million pixel sensor of similar format the company developed in 2007.
smaller than 35mm is not "huge"
Is it the price of silicon or something else that makes it more attractive to make pixels smaller vs. sensors larger?
This would be an 8" wafer for a single 4x5 CCD or CMOS chip, as 6" is too close, and 7" is not a standard size. Alternatively, 2 or 3 4x5 chips would fit on a 12" wafer, where the price of the starting wafer is probably somewhere beween $50-100.
Why does the entire sensor need to be perfect? Does one non-working photosite cause the whole thing to not work? Or does one non-working photosite merely mean there is one non-working photosite (so what? why does everything need to be perfect?)
I'd gladly take a 4x5 digital sensor with 20 pixels that were always screwed up on every exposure.
Or put in more reasonable financial terms, if someone offered me a 36x24mm DSLR for the price of a normal APS-C or 4/3rds DSLR, around $800-$1200, I'd gladly snatch it up even if it had 20 non-working pixels.