CD-RW disks are re-writable CDs, as opposed to regular CDs, which can only be written to once. They are used for a variety of purposes including backing up data. However, flash media such as USB pen drives and memory cards are now a much more popular and convenient method.
CD-RW discs are less reliable than other forms of media. The same applies to DVD-RW discs. They can only be written to a finite number of times before data starts to get corrupted when it is copied to the disc. Higher quality, more expensive discs typically last longer.
CD-RW disks are not very durable. By contrast, USB pen drives and other flash media is much more durable since there are no surfaces that are prone to getting scratched in a way that actually affects the content of the media. CDs and DVDs can easily get scratched, which corrupts data.
CD-RW disks were never designed to be used like flash media, although there are some programs that allow you to drag and drop files in the same way. Most of the time, however, it is better for the sake of reliability to copy the entire CD in one hit, doing one write process at once. This is slow--especially since you should use slower burning speeds to ensure that data is not corrupted during copying.
Optical discs are much bigger than any other type of computer media. They need to be carefully looked after and kept in a case too. Compared to the tiny flash drives and cards that can easily be placed in a pocket, a wallet or on a key-chain, a CD-RW is much less practical for keeping with you on the move.