Two posts taken from Anandtech comments:
http://www.anandtech.com/show/6054/google-nexus-7-mini-review/2
If you guys have been following ANdroid team since the pre G1 days, you will find that they HATE external storage and wanted flash and no SD for the G1 and all Android devices. The problem was Apple's contract manufacturing buyers secured the majority of flash memory allocations for a few years. This meant it was not practical for a few years to put anything beyong 4gb and alot were half of that.
Google was forced to embrace sd cards as a reult, and still were a year late getting an official apps2sd or sd cards. They hate coding for external storage and the security concerns. The goal all along was a Google market portal and cloud storage. Android team has stated this a few times, so not conjecture.
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Actually his comments did make sense. nand (internal flash memory) /= sd card (external, much slower flash memory) so please take note of that.
Nand at the time the G1 came about was ridiculously expensive - whether due to Apple or not, I have no clue. All I do know is that in device teardowns, the storage was often the most expensive besides the screen and albeit for very little of it. For this reason, many initial Android devices had tiny internal storage...a ridiculous amount even, allowing the bare essentials to be installed which consists of the OS and a few apps.
It has been established, if you listened to Google devs since day 1, that they reluctantly used SD/external storage. It was a necessity in order to facilitate storing media and gaming apps early on.
They didn't even like the idea of non-gaming apps on them at all, but as time went by the need arose to allow it (since people would run out of storage space on their devices). Trade offs were made and it became an Android feature to easily move some apps to SD with the caveat that its widget could no longer be used on the ui.
If you've owned different brands of devices you'll see that each of them has their own implementation of how the system sees/names the external storage. Not only does this create a disparity for software devs but it decreases system security. External memory can also be an issue and liability to the system since they can be too slow or of bad quality and fail (a likely reason Apple didn't include the sd card slot in any mobile device).
Eventually we will see more and more devices ship without it. Even without consideration given to the cloud, it is just much better for a device to depend on internal storage. It basically removes all the wild cards that the microSD can cause from the equation.