Both the 360 and PS3 have USB ports afaik, so in theory this should be possible with a software upgrade, but I suspect that flash memory is considerably more expensive to (mass) produce than discs.
I would assume it be more expensive, but knock the price up on the games requiring the drive, also mass production does entail whole sale prices and the more you buy the cheaper it is so just go big on production. Oh and the 360 has the software upgrade with the new dashboard update that allows for non xbox flash drives and external HD's use as storage, which means a dev could load a game on the drive put some safe guard partitions to prevent erasing the content from the drive and ship it as is, and also having extra unused space on the drives would be a great way to go about storing new DLC for the games.