This is unbelievably stupid advice, yes it's fun to play with but it certainly isn't practical, especially running office software off of it. I know people who have run openoffice off a USB Flash Drive, but inevitably the drive failed and if they didn't follow proper backup procedures they would have lost some irreplaceable documents.
I don't see why this is stupid advice, I run dozens of applications off my USB flash drive. My USB flash drive happens to be an Intel SSD drive so the failure rate is probably lower, but it's nice to have a big portable drive that contains my entire dev environment so I don't need to do anything fancy (like doing a git repo) for having a perfectly portable environment. Flash is getting more reliable these days so I don't think it's a bad thing running applications off of flash disks.