...Somebody should make a little camera with the ability to point the flash upward.

The problem with that idea is that, as you noted, most flashes aren't powerful enough to light up a room this way, and it would be difficult for the camera to meter it automatically, so it would only be a mode for people who knew what they were doing. Maybe they could make it closer to idiot-proof by just having the camera do an internal Auto Levels after taking the picture.