USB Flash Drive as a main hard drive (Macbook Pro Retina 13" Mid-2014)
As you have 16GB of RAM your CPU will be mostly playing with it and very rarely access the USB drive, unless you constantly access stored information on the disk.

Common users do not do that.

So I have Firefox, Chrome, Skype, Mail, open and my access to the SSD is minimal. 

see Data read/sec and Data written/sec. 

As I constantly use all of those aps, there is no data exchange with my SSD.

However in your case the OS X engine also resides on the external disk, so I can not tell with certainty.