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More on topic with this thread: One example of a game that wouldn't fit uncompressed on the cheaper medium = "o noes the switch iz doomd!!"

Flash storage is drastically superior to discs for a variety of reasons. It is more expensive, yes, but it offers a tremendous performance increase. I do agree, in this day and age where you can buy 32GB SD cards in bulk for less than $5 ea (just based on the very first Google result I found) - a markup of less than a dollar from the cheapest 16GB price I found - that there's no reason it should be as expensive as you claim in the OP, but honestly I doubt it actually is as expensive as that, anyways.