I've had cats for nigh on four years now; two cats. For most of their lives they've been kept indoors; one has only once been outside (when he managed to fall out an open window), the other spends probaby equal time outside and inside (he's sitting on my lap at the moment) - he's desexed, and microchipped, too.
I live in a very suburban area almost underneath a motorway overpass; minutes from the centre of Sydney. Where I live, no native species visit except Brushtail possums that use the roof of next door as a thoroughfare, and are about twice the size of the cat that is allowed outside. He never touches them - actually, he runs back inside when they're in the area. The only thing he's ever killed are the rats that live in the gutters in the back alley behind this block of flats.
To me, that's acceptable. My cats have next to no impact on the environment.
However, I can see the other point of view, too. I grew up in the mountains, and our neighbours seemed to all have cats that they didn't bother keeping tabs on and would just roam through the bush. None were desexed, so sometimes there were kittens everywhere.
I'd regularly wake up in the morning to find the corpses of beautiful Bluetongues, Crimson Rosellas, Magpies, and, once, a baby Brushtail Possum. This devastated me as a kid (I loved all the native wildlife), and I'd talk to my friends about keeping their cats indoors - they never listened. It was just easier for them to let their cat roam, they said.
It makes me sad that, as a pretty responsible cat owner, there are other cat owners out there really doing damage to the reputation of being a cat owner through sheer negligence. If people are going to take on a pet, they should be fully aware and prepared to accept the responsibilities that go with pet ownership.
I used to chase all cats out of my yard in the mountains; usually throwing water at them. I'd never advocate killing another person's pet, though - never. That's illegal. Calling the council is a great alternative, though.
I do, howver, advocate shooting feral cats with no owners, which are the biggest problem in rural areas. So long as it's done quickly and humanely. I'm all for getting rid of feral cats, cane toads, goats, foxes, pigs, all feral animals - we introduced those species, so we should be the ones to make sure they don't get out of hand.
So while I do think that cats can pretty easily be kept in check and not decimate wildlife, I think that steps have to be taken to eradicate the feral problem.