The floppy did grow a bit, it was just too little, too late. Don't you remember the Superdisk LS-120 Zipdisk killer? It was a whole 20 MB bigger than an Iomega Zip100, and then Zip released their Zip250. So awesome I almost switched back from Zip because it was backward compatible with regular 1.44 MB floppies. Sadly, it was too late, I replaced my Zip drive with a 4x CD-RW as the Zip250s were coming out. Later the Zip 750 came out which beat out my 640 MB CDs but at too great a cost. I was almost sorry to see both those magnetic technologies react too slowly to optical media. Sure they had Jazz drives that offered gigabyte storage, but optical had won due to lower costs and nearly ubiquitous compatibility.
Now we see the wheel rotating again where Flash media is a better deal than optical media, and opitcs are reacting too slowly to electronic media. I mean, even if every PC had a blu-ray player, and blu-ray disks were only $5 each, I think at this point people would prefer the small form-factor, reliability, and reusability of their microSDHC cards in USB readers and Lexar Jumpdrives.