I want pi3 to be able to connect to 2 wifi access points at the same location. There are 2 wifi adaptors (the on-board and a plug in dongle). What I want to do is have a wlan1 use the wifi dongle that connects to an access point for IOT remote devices and wlan0 connects to user's router that has internet access. Can I have the standard supplicant file on the pi SD card with settings for the IOT node access and another supplicant file on a USB memory stick? This would allow user to enter their own wifi credentials in the usb file and not affect the OIT network?
Yes this should be possible. You can link to different wpa_supplicant files in /etc/network/interfaces like
auto lo iface lo inet loopback allow-hotplug wlan0 iface wlan0 inet manual wpa-conf /mnt/router.conf allow-hotplug wlan1 iface wlan1 inet manual wpa-conf /etc/wpa_supplicant/wpa_supplicant.conf
This should work fine. You should just ensure that the thumb drive is pluged in, the mount path is correctly set and the file will be found there. Another thing to ensure is that a text file created with windows might have different line endings and could therefore not read correctly.
Edit: It seems that you want to give the Pi to persons that haven't to much experience with Raspberry or Linux.
If it is for many persons there is maybe another approach:
Until the Raspberry has a valid wpa_supplicant for wlan0, the Pi starts in a config mode, where wlan0 brings up an AP and a www-server with a form to put in the routers credentials.
After the input is submitted and validated, trigger a few scripts that run wpa_passphrase to generate a wpa_supplicant file. Then a script can rewrite the /etc/network/interfaces so after a reboot the Pi will connect wlan0 and wlan1.
A nice add-on to this you can use the other dongle to create a list of available wifis with
iwlist wlan0 scan
and a script that scrape the SSISD form the output and write this to a text file. Use this text file to provide a select list in the config web site. This "get ssid" script run periodical you can use some ajax to refresh the config web page...
... but this is maybe just an approach if you have many users or like to fiddle around. ;)