The hard part would be the board layout (USB2 requires some line impedance matching, afaik) and the actual packaging.
I reckon you could (conservatively) fit the necessary circuitry into 1 or 2 microSD sized cuboids, maybe one above the plug/socket, and one below. Maybe even less if you eschew some of the spec and only support daisy-chaining your own devices.
It is pretty though.
If I want to plug multiple drives in, I just do. There is no reason I need to plug them into each other.
Whoever made it probably imagined that the drives would share a filesystem (i.e. one drive letter for all of them) - but did not think it through since doing that is too complicated to be practical.
I agree that it's not very useful. There's probably a complicated way to achieve something similar using a proper hub, a bunch of sticks, and software. But most people are fine with a bunch of sticks for different things - "my live boot OS", "my music", "my photos", "all my other stuff".
More useful would be a USB stick that came with stickers to describe content - cute little camera icons or music stuff. Or at least a strip that the user can write on (with a pen, not file system) on the case.
As others have said - it is pretty though.
[1]: http://www.yankodesign.com/2010/03/22/running-out-of-usb-por...