There are advantages to both approaches, but I expect the XSX drive being proprietary to be more convenient, stable, portable, and affordable than the alternative approach. Think of it like a next-gen memory card instead of traditional PC internal expandable storage option. We'll see.
On PC I'm currently on 1TB SSD and 3TB HDD, but I'm eventually going to need more fast storage. I'd prefer a slower SSD with much larger capacity over a bleeding edge SSD with max transfer speeds. I like space to park games I play with friends and family, swapping from a USB with massive games or re-downloading would be a pain in the ass. It can be counterproductive to have "near-zero" loading times, but have to swap games off USB to a 1TB or 825GB SSD. In my opinion, of course.