I wouldn’t use a dongle-sized external drive either. The concern for me (apart from the unreliability issue) is that if you’re participating in a festival or any other kind of event where there can be a rush to get off stage, it’s way to easy for small things to get lost…the dongle might fall out unnoticed, someone might bang into your laptop by mistake in the rush, etc.
Then you typically don’t find out until the next night (if you’re on tour) at which point it’s too late to do anything about it.