How exactly do the cards fail to keep those pictures? Because those flash cards are sturdy and are known to even survive a cycle in a washing machine, now try that with your harddisk after storing your pictures on that.
Do people massively misplace their SD cards (I hear rumours they do actually) or do they overwrite them or what? I'm sure their ad-research article had some statements on that too.

What a market, 1GB portable hard drive in a smart shiny case with slots for camera cards.

Add in some software on a CD that helps users tag there photos with "Holiday to Blackpool 2008" or "John's 23rd birthday", plus some a simple "print photos at cheap online shop who post them to you" service, and I reckon that product would sell. What about you?

There needs to be some simple "home backup" tools. Now is the time for a company to come up with a clear and simple brand name and start pushing it's products. Photos, videos, computer docs, emails etc. All stored in portable hard drive you can put in a fire/theft proof box so your memories are safe forever.

I've seen a number of people use the flash cards as long term storage! They'll have a small stack of them, getting a new one each time an old one fills up. When they wanted to email a pic', they'd put the card in the camera, hook the camera to the PC and email it from there. What was their reason for doing this?

They were afraid the PC would crash.