Would a 360 update that fully enabled external hard drives be a big deal?

[kn]

I'm just curious... Microsoft continues to push the core/arcade as an option to the premium...  I'm just wondering if technically it would be feasible to connect an external hard drive and derive enough performance through the USB port (is it USB 2.0?) to make it a workable alternative to the snap-on drive?  I realize there may be a bus issue, but it would be a way out for MS.  They could continue to sell a "premium" or "elite" and sell a core to those that want to use an external drive instead.  Enabling external drives to work the same as the snap-on drive would be HUGE IMO.

This would be an interesting tack to take since it would "allow" MS to finally admit a hard drive is needed for developers to get the most out of the console and won't be hammered (as much) for admitting it and abandoning core users.  I've got a 500 gig drive I paid 80 bucks for at Best Buy... Why not be able to use it for save games, demos, etc.?  I know Microsoft wants to nickel and dime their customers to death, but this would be a smart move in my opinion (assuming there aren't any real technical limitations).