So ? Consumers can still buy DD but now it would be on an SSD or a comparably fast SD card / external drive. Nothing changes for the consumer except the consoles get smaller , cheaper and load times decrease
Costs change pretty damn massively for the consumer. 1~2 TB of SSD space is going to add a couple of hundred dollars onto your console price. That's a pretty huge change in price to play PS4Pro games.
SD cards do cost more but not significantly more. There would also be savings via packaging and shipping costs. Along with other things like not needing a hardrive to install to and savings on the console itself.
DRAM exchange is currently showing $4.89 session average price for a measly little 16 GB SD card. And these aren't super fast 300 MB/s cards. The cost of having a 128GB card for the likes of Master Chief collection, and another for Forza Horizon 4, and another for Halo 6, and another for Gears of War 5, and another for .... etc etc are horrendously significant.
And those DRAM exchange prices don't include the cost of installing games to the cards and then validating the installs.
On top of this, the console will still need at least 32 GB, or more likely 64GB GB for dashboard and minimum functionality for saves, dash updates, game patches etc. So that's immediately a chunk of your savings on having no HDD lost, and lost DLC / DD sales opportunities (as not everyone will immediately want to shell out on SSDs and external caddies.
Finally, protecting retail will mean DD games rise in price in line with the now $10+ more expensive retail games.
Why would you need to install across multiple sd cards ? SD cards are capable of 300MB/s far greater than the current mechanical drives in the xbox one or ps4 . They can be 8 gigs all the way up to 256 gigs. Current games are less than 50gigs in the majority of cases so they would fit on a 64gig card easily. As the generation goes on nand prices will continue to decrease as it does everytime we discuss this. Except blurays will still have the same limits and same horrible speeds. The only advantage is the shrinking cost to GB ratio.
As Shifty said, the only way to avoid huge amounts of wasted space on your SD cards is to spread across multiple cards. So you do that or you accept the huge amounts of wasted space. Many games with patches are already over 50 GB and increased assets quality will only see games sizes increases.
An SD based Scorpio would be absolutely dead on arrival and a disastrous misstep. The high cost of SD cards, the huge sizes of AAA console games, and a requirement of additional purchases of external SSDs as the only way to play DD games without juggling SD cards render such an idea unworkable in practice.
I was keen on the idea of a flash based console a few years back, but ongoing realities and ballooning games sizes mean it's simply not an economically viable proposition.