I own the older SimpleTech Bonzai model, bought ~five years ago, also with a 256MB SD card - it is simply unforgivable in this day and age to still sell this with such a tiny card. Almost as bad as those 16MB cards in digital cameras, yech. And this at a time when you can buy a 2GB card for $10.
On the other hand, as additional cards are so cheap, it's not such a big deal that the included one is so tiny - essentially you're paying for the card reader, for its convenience and portability. I like the fact that this allows you to use any SD/MMC card and plug it into any USB outlet - although in reality it's too wide for some of them, in which case you'll need a USB stub cable.
Yeah, you can buy a regular card reader -- but I wouldn't want to drag that around with me -- the Bonzai comes with a lanyard, and is as light as any thumbdrive. I carry it with my camera, and often use it for quick data transfers from/to my scanner/printer as well. And while many multi-card readers make inserting the card correctly difficult (can lead to shorts and contact problems), this is trivial with the Bonzai.