It really is. Fortunately with modded firmwares you can use the SD card for more than it was originally intended, like partitioning it for storing your applications and even a linux swap. Still, it's a mega usability nightmare. Because the card also stores all your photos and music, when you want to connect it to your computer it has to unmount on the device, and there goes all your apps with it. Which causes things to hang and die.
Considering the cost of physical memory these days.. it doesn't make sense not to include a larger bit of internal storage. Heck they can even keep the SD slot on there for extra storage for those who desire it.
Depends on how you expose the SD card to the computer. If you let it touch the filesystem directly, then yeah, the device can't use the card at the same time. But if you make the phone act like a USB network card, and then run Samba on that network interface, both devices can modify the data at the same time. (My Archos/Android mp3 player does this.)
There is also some media sync protocol that Microsoft invented that avoids this problem.
Considering the cost of physical memory these days.. it doesn't make sense not to include a larger bit of internal storage. Heck they can even keep the SD slot on there for extra storage for those who desire it.