Newbie kit like that will never catch on 
The big problem, for me, is that I haven't seen the same big decrease in the price of Flash memory (per GB) as we did with hard drives.
http://en.wikipedia.org/wiki/List_of_audio_formats
Vinyl - 1948
8-track - 1965
CD- 1982
SACD - 1999
AAC - 2001 (presumably with the iPod)
The head dude at Rotel announced in an interview recently that he considers Blu-Ray a dead format (not the first to say it, but interesting that an audio guy felt the need to mention it), and its not hard to put a large red line through many of the other technologies on the above page. Looks like I had better dash out and buy a bunch of microSD cards ! 
Ironic that one of the oldest, vinyl, looks like outliving everything else on that page. Apple will progressively move music playing across to iOS and I believe the iPod wont be with us in 5 years time.