He seems to be saying the same thing every other sane person has said all along.
Even he dismisses carts though. That I don't get. The most profitable system on the planet right now (that isn't running iOS) runs on carts. It's called the 3DS. Vita also uses carts. They aren't dead or a thing of the past, not yet anyway. They are $40 games that sell as many as ten million copies. They are flash based (that's really really hard to avoid now) and they "load" the same as if they were CD, but they are carts for sure. I don't see this being a problem for a project like this.
I think the problem is that the system was intended to run games that are usually distributed digitally and are priced accordingly. I can buy Mario Kart 7 for the 3DS either on a cart, or download it from the Nintendo eShop, but I'm going to pay the same price either way. The Retro VGS is ostensibly taking games that sell for $10-20 in digital form, and trying to sell them on a cartridge for $40-60.
Edit: You could use the Sega 3D classics on the 3DS as an example. They sell for $6 each. If Sega tried to sell them individually on carts in retail packaging for $19.99 each, the only people who would buy them would be collectards. Now, if they sold a compilation cart here (as they do in Japan) then that would be a different story. But at the end of the day, the only people who would be willing to bay much more than $6 per title included on the cart would be collectards and staunch anti-digital folks.
