Insufficient Storage on changing default install location
By default I think apps are only installable to phone storage. The developer has to specifically allow the app to be installed to external storage (SD card or emulated SD card storage). 
The ADB shell command you have used is only designed for use during development (see http://developer.android.com/tools/help/adb.html). It may be that despite issuing this command the system is still trying to install to internal memory.