Why? Because of the performance.
199$ for 4GB drive + X2 battery is great! But the advertised read-write speeds are horrible. 2MB/sec read speed and 1.75MB/sec write speed is very very low. UMD disks read around 1,5MB per second. Sandisk Memory Stick Duo Pro reads about 12MB per second and writes about 5MB per second. Even the slow, plain Duo cards read about 4MB/second. If that huge drive can only read 2MB/second, then that means incredible long loading times compared to Duo Pro cards.
Sorry to burst your bubble, but I must say my bubble was also burst when I noticed the indicated speeds. I'm really disappointed.
Edit: Fixed UMD read speed.. Should be 11Mbit, not 11Mbyte... So the 4GB drive is faster than UMD disks, but still much slower than Duo Pro cards...