Yes you can use an SD card to host virtual machines. The utility of that depends on the card you have and the speed of the card reader built into your machine.
I've been using a Dell E7240 Ultrabook as my primary on-site machine. It only has a 128GB SSD so I've been debating on where I can put virtual machine disk images. It has an internal MSATA and an SD card slot. SD cards are easier to get around here so I purchased a couple 64GB SD cards to try out.
I get up to 17MB/s copying my VMDK files to the SD cards on the E7240 and up to 42MB/s copying VMDK files on the Macbook Pro 2011.
I tested the following cards with CrystalDiskInfo and my MacBook running Windows 8.1 bootcamp. The Macbook Pro results imply that it may be a limit of the E7240s SD card slot interface, possibly some kind of USB.
PNY StoreEdge 64GB. This is a short card intended for Macbook and Macbook Air with short SD card slots. There are no specs on the package.
PNY Storage for Ultra thin Notebooks 64GB. This card is marketed as additional storage. There are no specs on the package.
San Disk Extreme Plus 64GB. This card is rated 80MB/s Read and 50MB/s write and is targeted at high end photography.
Here are the benchmark results. Two of the cards had poorer than expected write speeds. I reformatted them using the SD card industry formatting tool available on their web site. This caused a big jump in the test Sequential write speed. Both the PNY and Sandisk Extreme Plus went from ~23MB/sec to ~41MB/sec. I'm not sure whether the formatting helped because of the formatter or because it erased any data on the cards.
VMs run from an SD card OK on the E7240 for lightweight work but it was disappointing. The E7240 requires an MSATA as a 2nd for any kind of performance. In the mean time the SD card will work for testing and for running VPN software to get into work.
The StoreEdge, or any other fast card, on my Macbook, is pretty zippy for most things I do in a VM. It needs more testing.