Actually there is a lot of dissatisfaction among small and medium-sized retailers / restaurants with their POSes. Expensive to install, expensive to maintain, software that's stuck in the 90s, and shady processing deals. They don't call em POS for nothin. Fixing that is hugely disruptive.
Your argument is based on a false premise. Nobody said things would change "overnight" at every level. Square is starting with the simplest case. No doubt they're hard at work building out a more sophisticated register platform that will move them upmarket.
Funnily enough, my friend's startup is doing a web-based POS system and they have adopted the tagline "POS... Finally it means Point Of Sale again" :-) And yes, you are right, there are several players out there now who are planning to be hugely disruptive in this area, because the incumbents have rested on their laurels too long.
Your argument is based on a false premise. Nobody said things would change "overnight" at every level. Square is starting with the simplest case. No doubt they're hard at work building out a more sophisticated register platform that will move them upmarket.