USB keys do not last forever. After so many writes to it, it will no longer be "usable".
Can you try formatting it another computer? What does it say the size is in another computer?
Depending on the model - you might be able to go to the manufacturer's website and get some diagnostic tools.
Just checked and formatted on a different computer. It's still reading at just below 2 MB.
It's not particularly high-end, but I'll try the manufacturer website. Thanks!