All fine and well but...
If you don't have a really fast access card in there it will be painfully slow navigating and selecting tracks. Having owned a couple of MP3 players with card slots to get performance that wasn't slow and tedious you have to use the fastest card you can find. Even then it was much slower than when using the players on board memory.
Couple that up to the card reader they put INTO the device likely to be only a bog standard cheapo-mart thing and it'll just compound the issue. From the off people will say "well how does it compare to my X thingy player" and find it slow by comparison, so will ignore the card only players.
Sorry to sound like a nay sayer but things are going to have to improve dramatically from the current situation with card memory performance in media players for this (good), idea to be viable.
I do like the idea. Hang on though... on average people change things like these every 4-5 years because they either break or new models offer improved storage. Assuming storage becomes a non-issue because of the cards, are you telling me the manufacturers are going to improve the build quality of their devices so they can indeed last 10 years to make the idea of pure card memory players truly viable?!
Yeah right! My 8gb Sansa didn't last 18 months before the flimsy front jog dial said "fk off I'm tired" and stopped working.