The N64 cartridges were bad for 3rd party support, but I wouldn't trade them for PS1 discs even if my life depended on that. PS1 was infamous for the terribly long loading screens, while in the N64 loading screens are almost non-existent. Yes, we lost Final Fantasy, but in the time it took for me to write that sentence I already turned my N64 on and started a match of Smash.

So to summarize, the problem with the N64 cartridges from a consumer perspective, is that Nintendo lost 3rd parties because of it, but the NS2 Game Key Cards on the other hand were made to preserve 3rd party support on the NS2, that's the difference.

For the N64, you would have been far better off just on-loading some cheaper storage RAM into the system (4-8MB additional) and then using a 2-4x CD-ROM drive.

The extra RAM would act like a virtual cartridge on-board the system and then you could have the benefits of all of mass CD storage + cheap main format + tons of 3rd party support with minimal loading in game. It would require a bit of loading when you first start a game (maybe 5-10 seconds) but after that a game could theoretically run just the same as a cartridge if the developer wanted that. 

If Nintendo had the benefit of hindsight with the N64, this is what I think they would do. 

That said I played tons of Playstation games back in those days and the loading times were never so bad that it really detracted from enjoyment of a game. Maybe for a fighting game that would be one situation where it could be bothersome, but again having a secondary pool of essentially cartridge speed RAM inside the system would've negated a lot of that issue too.