Let's say you're phone gets damaged, you can't simply remove the sd card, you have to replace the phone and lose everything on that phone!
If your phone gets damaged, the SDcard will also often be damaged or unremovable. Not to mention that the SDcard in your phone should
never ever (ever ever!) be your single backup of any data you think is important to you. That's just common sense when it comes to backup and data security.
But that's not what I'm talking about here...
Oh and what issues do they cause?
I've NEVER had a problem with an ad card.
I think you're missing the point here.
My problem isn't with SDcards themselves (they're great in my camera), it's the sacrifices you have to make on the phone in order to accept and use SDcards (and by proxy, UMS) in the device.
You create a partition scheme for the internal storage that creates the issues. You have to have predefined unchangeable (without serious hacking and risk) partitions for the system, cache, apps, app data, media and the SDcard. The device manufacturer sets it up for you at the start what
they think you will want for each of the areas even if you don't want them that way. Maybe you use a ton of apps, but they've not given you enough room in the phone for apps and you have gigabytes upon gigabytes of wasted "media" storage that you can't use for your apps. The opposite is also true, maybe you want all of your storage for music and only have 5 apps installed, you now have partitioned storage sitting empty waiting for apps that will never be used and you'd prefer it was used for media.
This is why users of the Desire HD (and many other devices) are mad because they can't receive an OTA. Their phone is partitioned to use an SDcard and UMS, and can't be repartitioned to fit and expand an OTA package in /cache or have enough /system area to install ICS. People forget that this is one of the main reasons why updates and OTAs can't be pushed to phones.
Go take an original Galaxy S and try to download a new game that's 150mb (into a /cache partition that's too small), then you'll understand why it's a bad idea to keep putting these arbitrary partition restrictions on devices. If you would just deal with not having removable storage, you eliminate every single one of the problems listed above, and have 1 solid partition that can be used for whatever you want. The Galaxy Nexus will
never have a partition problem when receiving an OTA or installing apps.