Well, just about a year ago I bought a boat-load of 2Gb SD cards for £3 each from Amazon, so I can easily see this being true. They are tiny, convenient, pretty reliable, fairly indestructable, supported by lots of different peripherals, easy to work (i.e. physically manage, eject etc.), cheap.
If I move music about, it's on an SD card. I have a £50 CD/MP3/SD/Radio player in my kitchen that plays straight off SD. My wife has a Palm, that can play the same music off the same SD card or run the Satnav off another SD card. I have a GP2X, that can play the same music off the same SD card, and run games and movies off SD card. There's a little problem with video formats between the two but that's far from a problem if this picks up motion. We have an SD card camera, that saves JPEG's we can all view. At my parent's house, it's pretty much the same story and we are always swapping SD cards for various things. People's phones use SD or mini-SD. The Wii saves on SD cards (I've seen idiots pay £30 for "Wii memory cards" when in the next aisle are SD cards of identical size/make/speed for £5).
SD really is an under-appreciated storage format and I would love for it to become more "mainstream" in this way.
The readers are dirt cheap. The interface electronics can be absolutely trivial (they are often used as a hobbyist ROM storage because they can be run in a simple 2-pin mode, slow but they work). The software interface can be incredibly simple. They are incredibly fast considering their size and low number of pins. The SDHC version can easily address 100's of GB's in something as big as a large postage stamp. The only "problem" with SD is devices that don't support SDHC (4Gb + cards) properly (software-only update needed) and the write-protect tabs that aren't - the tabs hit a switch in the device that the software reads and refuses writes - there is no "physical" way to stop someone writing to an SD card, it can be bypassed in software by bugs, bad programming, or in hardware by faulty switches or mis-fitting cards.
But yes. I'd buy it. Please. Try not to put copy-protection on it or change the physical/electrical format to allow it but this is a brilliant idea.
Imagine the possibilities - you buy a movie, play it on PC with an adaptor/media bay, play it on a laptop, play it on a set top box, play it on a PSP or other handheld device, all from the same physical object. Fantastic idea. Stuff the HD, I'm really not interested in that - start doing this NOW. I'd gladly pop an SD card into HMV and pay for a shed-load of old movies on SD card if I can walk out in under half hour or so.
The best bit about SD? When I take my GP2X out and about, I can take a pocketful of cards and be a storage king. 2Gb of games, 2Gb of Music, 2Gb of Movies, 2Gb of text, 2Gb of files from my PC for troubleshooting. It cost me about £15 for them a year ago, they all fit into something the size of a couple of AA batteries and hold everything I can ever see a need for, even on a long trip.
Give it a couple more years and 16/32 Gb cards will be in the same position. In five years, you'll get 128Gb for peanuts. But the format is viable TODAY. A Wii software update could make the format work on the most popular console NOW. Most handheld devices take SD in some form and it's only software that stops them turning into mobile movie players. If you can get the Wii on top of this, you could easily get SD cards in every set-top-box in a year or two, where the MPEG decoder is already built-in.
Stop jabbering about it and DO IT. Get Blockbusters onboard now.