AVR 8-bit microcontrollers are (modified) harvard architecture. that means that the program and data memory are completely separate except for the special ability to load program data into ram such as string constants, so you can't load anything into ram then run it as if it was code, like you can on von neumann architectures such as desktop PCs.
This basically means that we can only use SD for data. If you want to store code on one, you will have to write your own language and interpreter, or use a microcontroller with a von neumann architecture instead of the atmega168 on your arduino.