Hard to do proper disc brakes without hydraulics and hard to do hydraulics on a folding bike. The minimum bending radius of the brake lines is the limiting factor.
I have used hydraulic disc brakes and mechanical (wire) disc brakes. Yes, it's not the easiest to set up, but on my Hayes MX5, it works well enough that I have to seriously worry about locking my brakes :)
Disc brakes with cables work absolutely fine. Yes you're leaving some performance on the table compared to hydraulic, but most folding bikes aren't used for racing.
I've had them, also hybrids (boosted), compared to full hydraulics there is an enormous difference and I would definitely use a cable actuated system over rimbrakes if there was no alternative but only after exhausting every avenue of getting hydraulics to work. I like the option suggested by the other commenter of using an automotive flex hose for the folding part.
