Street Fighter 2 super dooper HD remix might only need 5-10 gigs worth of memory, so they just throw in one 16 gig module (or two 8 / four 4 gig modules for data striping and faster loading times) and ship it. Metal Gear Solid 7 and its over 9000 hours of CGI might need 200+ gigs, so they just throw in as much flash memory as they can and go to town with their high res textures and lossless a/v.
Lets say Rock Band 5 ships with 80 songs at approximately a half gig a song, as well as 20 gigs of everything else, for a 60 gig total footprint. They then could ship the game on a 120 gig flash cartridge, mark half of it writable to the console, and boom. Now instead of having to carry around your xbox hard drive when visiting friends for RB parties, you just take the cartridge and it has the DLC on it.
Flash is a loooooong way from beating the disc.
Also, I suppose Blu-Ray will be stuck at it's size because of the norms and patent hell, whereas sticks can just continue to grow. Flash drives are becoming popular, so the price of Flash in general might come down.
Who cares about reprogramming your stick: for blu-ray, you want to buy a movie. The movie studio is the one wanting to make a profit, so most of the sale price of the movie should not go into the media.
Therefore, mass producing blu-ray movies, at around $1 (or less) per disc is very effective (the studios will sell you the movie at $9.99 or more).
When will a USB stick for 20GB cost less than $1? It's still quite far off.
Whereas a USB stick, even bought in large volumes, can only be so cheap.
You don't care if memory sticks can grow - you have, say, 20GB of content you want to deliver to your customer. It's just extra cost if you buy a 40GB memory stick to carry it.
I just don't see any incentive (other than marketing/coolness) for distributing anything on a USB stick.