I gotta say I'm a bit baffled at the moment. It started to back up, after it reformatted the disk etc. Got to about a couple of GBs and, then, says it was disconnected. So, I'm working on that now. It is a slower version of USB, so I'm planning on getting a USB3.0 stick to replace it.
I think you are a bit biased and inaccurately. The reliability of a solid state drive, like a memory stick is much higher than a rotating disk with mechanical parts. So, it's not a matter of cheaping out. I have no desire or need for the Time Machine to back up my files. I do that, on my own, using other memory sticks. I keep one unattached at all time to assure that nothing can come and wreck everything I have. All I want Time Machine to do is backup the operating system. Actually, I'm not all that worried about it in the short term but, long term, the hardware in any given system does not keep up with the changes to the software and, at some point in the fairly distant future, I expect to hit a wall as far as updating the operating system - my hardware will not support it, at some point. That's almost a surety. The new hardware systems will have potentials of which the software developers will take advantage and the older systems will not be able to keep up with the software.
So, I would argue that anyone using a hard drive for their backups is out of their minds. If that is the only backup you have, you are a great risk. You drop an HD and it is likely toast, burnt toast. No recovery possible in many cases. Not so with a memory stick. Unless I drive over it with my car or take a shotgun to it, it is probably going to survive. Actually, it would probably survive being run over. Heck, I don't even completely trust that so, for essential files, I store them in a place online that has continuous, offsite backup. And, if you leave the Time Machine storage attached (or any storage), you run the risk of it getting corrupted by a virus attacking the computer. Believe me, I will have, at least one copy of the Time Machine unattached.
Since Time Machine accepted and erased (reformatted?) the memory stick, I figure I'm good to go on that front but....maybe not considering what it's doing. I may end up using disk utility if it keeps acting funny.