Entanglement is arguably the key quantum-mechanical resource for improving the performance of communication, precision measurement and computing systems beyond their classical-physics limits. Yet entanglement is fragile, being very susceptible to destruction by the decoherence arising from loss and noise. Surprisingly, Lloyd (2008 Science 321 1463) recently proved that a very large performance gain accrues from use of entanglement in single-photon target detection within an entanglement-destroying lossy, noisy environment when compared to what can be achieved with unentangled single-photon states. We extend Lloyd's analysis to the full multiphoton input Hilbert space. We show that the performance of Lloyd's single-photon'quantum illumination' system is, at best, equal to that of a coherent-state transmitter of the same average photon number, and may be substantially worse. We demonstrate that the coherent-state system derives its advantage from the coherence between a sequence of weak—single photon on average—transmissions, a possibility that was not allowed for in Lloyd's work. Nevertheless, as shown by Tan et al (2008 Phys. Rev. Lett. 101 253601), quantum illumination may offer a significant, although more modest, performance gain when operation is not limited to the single-photon regime.