Use 256GB USB Thumb Drive as main boot drive My iMac is very slow and I would like to start from a fresh Mavericks install. But instead of spending the time to backup my internal drive, I would rather just get a big 256GB thumb drive and install Mavericks on that. I would also benefit from the speed of having the OS on a flash drive.

Does anyone see any issues with a solution like this? Since I would be bypassing the internal drive completely as the boot drive, and making the internal drive just another extra HD?
Aside from the speed issues that other people have mentioned, you will quickly kill your thumb drive.

One thing that differentiates thumb drives from SSDs is the sophistication of their wear leveling algorithms, the amount of over provisioning of sectors,  and the availability to integrate their garbage collection with the host through TRIM commands.

Basically, thumb drives cannot tolerate as many read/write cycles as an SSD. They have only basic wear leveling and very few or no spare sectors if a block dies.  In contrast, a SSD can have 10-20% of its total flash capacity just dedicated to wear leveling and failed sector replacement.

As a result, SSDs can handle over 100,000 read/write cycles while cheaper flash thumb drives can handle only on the order of 1000s.

OSes designed to be run from thumb drives (like some variants of Linux and freebsd) try to avoid killing their host thumb drives by mounting themselves read only and using a RAM disk as the swap partition and system log partition.

OSX unfortunately does not have this feature.

In the end, you'll have a slow system that will thrash your poor thumb drive to an early death.