My first opinion about this was one of amusment, "what a fecking waste of time"
Ive been thinking about this a bit. Atleast when the latest Xtreme firmware comes out I wouldn't have to strip my Console back down to reflash the drive, just plug the external drive straight into my PC and reflash.
I do have 1 observation !
The only way I see this connecting to the console is via the Blaster 360 that Xecuter also sell. That will invalidate any warranty you had.

Thats also another $50 you need to spend and as it shows it fitted to the console alongside the external drive, thats also too much of a coincidence. I bet the whole setup will cost almost the same as a new arcade console. (Blaster 360 bundled or sold seperatly)
Just watch the announcement, I bet i'm right ! Anyone wanna wager ?
And if I did have a Blaster 360 fitted to my Console, I wouldnt need to open my console to reflash anyhow, so all this is mute.
Think I'll just stick to reopening my Console every new firmware release, its only once a year. If you need a virgin drive for Live, Spend the same amount of cash on a fully warrantied New console.