If the OS recognizes it as a normal drive, then it will be available.
If the OS thinks it's a removable drive, then it will not be avaialble for use as a scratch drive.
Check your device manager. I'm sure it's listed as a removable drive and PS only uses fixed drives for swap. If the device offers a special system driver, install it and it may be assigned as a fixed drive, if not, then there's jsut no way to coax PS into using it.
Thanks to both. OS sees the flash drive as "Removable Drive", which it is. I had mistaken a comment on this board somewhere to the effect that PS can see flash drives.