If you already have a 2.5" hard drive lying around, or if purchasing a hard disk tailored specifically to your size requirements is attractive to you, the Thecus YES Nano N1050 OTG might be exactly what you're looking for. It costs under $40 and you can use is it as a normal USB hard disk enclosure in addition to a portable backup for your digital camera among other things.
Of course, digital cameras seem to be the most obvious use for the N1050 aside from the USB drive capability. If you take a lot of pictures during your holidays without having a computer around, this device might be ideal for you: a cheap way to backup your pictures. The downside is that I'm not sure I would trust a standard hard drive to withstand the rigors of life in a backpack.
To be sure, robustness is astrength of flash memory, and one of the reasons why it's used in cameras and MP3 players in the first place. Today you can buy a 4 GB SD card for about $70, which has space for nearly 1,000 7-megapixel pictures. But if you're a professional photographer, or you simply have more than 4 GB of data to move around on a regular basis, the Thecus YES Nano N1050 OTG is an attractive option.
It seems to me that this product was made for fellows like me - tinkerers with a bunch of IDE drives lying around and nothing to do with them, who at the same time crave a cheap, sizable and portable backup drive. It might not be for everyone, but it sure sounds like a great idea to me.