When done correctly, with solid hardware (ie, not a cheap flash drive) with a reasonable amount of RAM (4GB is nothing) ESXi will perform well when installed onto a flash drive. I think your hardware has bottlenecks that need to be addressed if you want to run more than one, maybe two,Linux VMs on it. For reference, I'm still going 'old school' with my current host. With ESXi 4.1 installed onto a mirrored pair of 146GB 15k RPM SAS drives. With my next host (to have HA and such) I'll probably just install to a good flash drive and not worry about it.
I have been avoiding drobo products for years. I've seen more than enough postings, for people having issues using them with ESX/ESXi to maintain that mode. Currently, I'm using a QNAP TS559 Pro+ NAS/SAN in my home lab. I'm using both Gb NIC's in the device (configured for performance) and presenting out several iSCSI LUNs from it. I'm also using it (for now) to house additional files from my desktop and laptop (backup location). I do plan on getting another SAN/NAS so that I can do more. Most likely that will be a higher performance device/chassis. At that point, I'll migrate my VM's over to that NAS/SAN and configure the current one for my physical systems backup.
Whatever iSCSI device you get, you'll want to make sure you don't build in any bottlenecks for connecting to it. For me, that meant using MPIO settings for the host, tuning the device, and making sure the Gb ethernet switch is setup for max throughput. With all of this in play, the VM's are running as well, if not better, than when they were on a PERC 6/i card controlled drives (with BBWC)... Of course, the array I'm using has 5 spindles, setup for RAID 5, and I only had two spindles (SAS there though) mirrored (didn't want to lose data)... I do intend to test out vDR here writing to the internal mirrored array. I just need to order up some more RAM for my host so that I have enough to run that VM, plus a few more. Now that I'm on a contract job, I have spare income that I can use for such things.
If I was looking to set up a new host, in a home lab, I would make sure to configure/build it with enough resources to run more VM's (8GB of RAM to start). Don't skimp on parts/hardware either. Going for the cheapest part that will do a job is typically the more expensive route. By this I mean you buy cheap now, use it for a while, hate it, but it's past the return period. So you then order the part you should have ordered to start with, eating what you spent on the now hated item. Spend a little more now, to save more later. Too often people don't understand that until it's too late.
