I managed to get a GOOD copy of RetroPie working and running from USB only (no microSD needed).

You need to first ensure that your Pi is setup to boot from USB. This can only be done on the 3b and is detailed here:

https://www.raspberrypi.org/documentation/hardware/raspberrypi/bootmodes/msd.md

You only need to complete the first part of it (you don't have to do anything under "Prepare the USB Storage Device" -- only the "Program USB Boot Mode").

Once you've completed this step, simply grab the image provided from Google Drive and flash a USB drive. Supposedly only some USB drives work -- I tried a generic one from MicroCenter and it didn't work. I tried it on a Patriot and Samsung branded USB drive and those both work excellent.

Link: https://drive.google.com/file/d/0B9hGvs6yJgfJejhkblBiaWlxQlU

You'll flash the USB drive the same way you flash your microSD card -- it's the same kind of image.

Once you've booted, you'll need to manually expand the OS size (contrary to what was written earlier, you cannot use raspi-config). To resize, you'll need to run parted on the drive and then resize2fs. It's the "first" answer to this question on StackExchange: http://unix.stackexchange.com/questions/134796/how-to-increase-size-of-dev-sda2-in-suse-running-on-vmware

Why boot from USB?

USB is faster and more resilient than your microSD card. As I'm doing a traditional NES case mod, it also makes it extremely easy for me to take my OS and the like on the go.

Also -- I migrated my data from microSD to USB -- the easiest way is to do it per RetroPie's backup suggestion. Copy the Samba shares over on your "working" copy, install the image, then copy them back over. I had great success with this.

Hope someone else finds this helpful and useful!