The thing that bothers people is that HDDs are so stupidly cheap now that Nintendo shouldn't have any real reason to not include an internal 1, to save a small amount of money?

I don't quite get your point. Of course Microsoft isn't the original manufacturer of the actual storage medium. Just like pretty much any electronics component inside a video game console is a standard electronics component manufactured by company XY and not manufactured by the console manufacturer himself for that specific console.

Inside Nintendo DS/3DS/NES/SNES cartridges you'll find standard memory chips from electronics manufacturer XY. Does that mean that Nintendo games cartridges aren't proprietary?

Andrespetmonkey thought that 360's HDD was not the same as the PS3 and I explained. I guess I was wrong about not being proprietary.

When you're manufacturing a video games console and always tried to sell even the basic hardware with a profit, several dozen additional dollars of manufacturing costs aren't "a small of money". With an additional HDD, Nintendo would have probably not been able to stay under the psychologically important 299 dollars price tag.

In my opinion, it fits perfectly with Nintendo's usual strategy: Don't include costly features that only a fraction of the audience is actually going to use.

why is it that everyday this system looks worse and worse

I don't see much security being gained by those measures. In my opinion, since it is a standard external USB drive, people will expect to be able to use those drives for other things as well, so I think it will either use a standard file system (like they already did with the SD cards in the Wii) or the WiiU will create a special fixed size partition/file. I'd bet on the first though.

Will Nintendo screw us further by making us format our hard drives to a specific proprietory file type? As in we have to get the hard drive just for WiiU usage.

+

If Wii and 3DS are any indicator of it, then no. Again though, nothing official on these legit questions.

While you're here, why not partake of the cup?

I like the idea of put your own USB HDD on it choosing from any number of commercially available drives at great convenience and cost saving.

The X360 hard drives are too expensive with their proprietary shell
The PS3 hard drives are too complicated to swap

I have actually run out of space on my 500GB PS3 drive and now have to manage space even at that gigantic size. If it could have had USB HDD, I would simply connect additional drive to the thing.

I am a little concerned that 8GB of internal flash storage will not be sufficient for long term. Nintendo should go up to 32GB or more on that. This way consumers can at least try out digital or have enough storage for patches, upgrades, eShop only smaller titles and stuff without the bother of getting additional USB HDD first. They would only need to get external USB HDD if they do most of their purchases digital.