The advantage of a card reader is that its really cheap to print cards. It's an unrealistic system to use though, because you can't print in high enough depth on standard card stock to store really big games.
I like the whole idea of carts over discs for a portable for a number of reasons: portability (you don't need to carry a CD wallet with you, and you can't keep a GC disc unprotected in your pocket), lower power consumption, faster loading, and no skipping. Given the advances in the next couple of years, it seems likely that the cartridge capacity on the next system will be pushing a gigabyte anyhow, so the only real advantage of discs over carts (capacity) will be mostly a non-issue by then.