The USB key shouldn't get hot, as it's mostly only being "used" during boot. Unless you're using it for apps (which will kill it quickly) instead of a data disk or cache drive. Also I can't imagine needing more than 8 GB (unless you're using it for apps).
I'm currently using a Kingstion FCR-HS3 card reader, as is at least one other user, and I've updated it so I'm pretty sure it's not blacklisted. I switched to this card reader as there is a problem with certain USB controllers under ESXi, and unRAID 6 that causes the usb device to reset constantly. This doesn't happen if I use a reader.
Due to the new procedure for moving licenses to new USB devices in unRAID 6, which is automated, and for me took less than 2 minutes, using card readers is less important than it used to be. You are limited to using this automated process 1x/year, but if you are killing multiple usb devices per year, you're probably doing something wrong or have a hardware issue.
USB devices I've used successfully:
ATP Nano 4GB
Patriot 4GB Xporter