This is the root cause.
Microsoft had never intended Windows Phone 7's storage to be expandable, swappable, or removable.
Now explain this to Gramma...
the phone randomly generates a password that it stores in its internal Flash and then uses to secure the card, essentially bonding the card with the phone. By its design, a password-secured SD card (or microSD card in this case) can be read only with the password; otherwise, your only option is to erase it.
So, once used in a WinPhone, the card becomes useless anywhere else, and if you do swap it out, the phone will not recognize the new card. Given who will be fielding the irate calls, I can see the the OEMs being kingly asked to avoid this possibility altogether by not having a card slot to begin with.