Can anyone explain why it isn't possible to boot (or install) OS/2 from a USB pen drive?
To answer your question, you cannot get access to USB drives early enough in the boot sequence to make it work.
However, it IS possible. I have done it by hacking the bootAble project, but it is not, yet, properly documented.
Briefly, the basic setup is:
Create a small (50 meg is more than enough) FAT16 partition on the stick.
Make the remainder of the stick into either HPFS or JFS (I use JFS, and it must be large enough to contain whatever you want to include, which could be the OS/2 or eCS, installer).
Create a bootAble CD image (you need to understand how bootAble does that).
Manually modify that to remove the MEMDISK stuff (The QSINIT RAMDRIVE will be used).
ZIP that whole partition (ZDRIVE.ZIP), rather than use TAR as bootAble normally does.
Follow the instructions in the QSINIT package to be able to boot from the QSINIT PAE RAMDRIVE.
Manually put the rest of the bootAble stuff (anything that normally ends up on a CD/DVD, or in the old RAMFS RAMDISK) onto the second partition, and modify CONFIG.SYS (must be in the ZIP file) to have proper paths etc.
Now, if your computer will boot the QSINIT loader, that will unzip the file into the RAMDISK (must be FAT16), then boot from it. Note that you will have no access to the second partition until the USB driver gets loaded, and initialized (usually around the time that the GUI starts up), so anything that is needed earlier must be in the ZIP file that gets loaded to the QSINIT RAMDISK. Also remember that anything in the RAMDISK must be FAT16, with 8.3 file names.
Much experimenting is probably required, and there are a couple of variations, if you want to play with the QSINIT RAMDISK.