FSX on a USB sounds indeed like a joke.
Concerning MSFS there is a lot of misunderstanding regarding it's performance. The thing is, MSFS actually has better performance than FSX or P3D ever had.
On the same hardware, you will get a smoother experience with MSFS than FSX or P3D, provided you keep within the same levels of details across sims.
For example, in P3Dv4, flying over major airports or cities would come with a big FPS hit, which doesn't happen in MSFS. Same can be said about XPlane11 for example, which also provides quite good performances like MSFS.
The difference is also impacting the VR experience with the exact same logic.
And that's on an i7 8700k with a GeForce 1070-ti, so very far from high-end hardware...
The main problem is the necessity of a fast internet connection, yes.
My brother has a "medium-low" connection with speeds barely reaching 17 Mb/sec if I'm not mistaken. He can nevertheless use the sim without issues. The updates take a long time indeed, he lets them run through the day and night if necessary. Sometimes he also uses the tethering of his mobile phone 4G internet connection to go a bit faster as well.
Concerning the beta stage of the sim right now, this is unfortunately going to last for a while. We all know that.
Nevertheless, in its current state, the sim already provides a fantastic experience that other sims don't provide (yet, XP12 is just around the corner...). The latest World Update has transformed Switzerland so much I just can't get enough of exploring it in the helicopter or other slow aircrafts. I crossed the country just 10 days ago and it was a pleasure to follow the same route later on in the simulator to see the landscape from another, higher, angle