"I am already seeing my "normie" friends getting locked out of accounts due to not understanding passkeys."

In a weird way this is good news for us. If people are losing passkeys, getting locked out, and incurring non-trivial support costs as a result to the relevant companies, then there's no way those companies will crank down even harder by requiring hardware keys.

As an option, I don't mind it existing for situations like a work environment. Work environments are so much easier because there is a clear line to get my credentials reset, from scratch if necessary, even if I lose everything. The problem is that the consumer authentication case is even harder because it lacks that clear line without also creating a backdoor.

So I insist on centralizing my passkeys into a password manager. I have no passkeys outside of my password manager and will continue to reject them. If it's important enough to slap authentication on, it's important enough for me to not lose it because I couldn't choose where to stick it, which is in a basket that I protect very, very carefully.

Honestly I just don't see how something like Amazon could ever turn on the "require hardware key" feature without blowing their own foot off, or really any consumer-facing service. Everyone loses keys. To a first approximation nobody is going to buy three keys and correctly manage setting up all of them to work with every service. Even if we magically stipulate that all sites support it and they all have some integrated unified approach so that there's no software-side friction at all to register all three at once everywhere, you just get too many people who stuck all three keys on one keychain, people whose houses burned down, people who so successfully stored both backups "securely" that they have no memory of where they are anymore or how to get them back, an endless parade of lost keys. The consumer as a whole is not capable of managing hardware keys.

Given how often my household loses its second car keys for extended periods of time I am not exempting myself from this. My work key lives a much simpler life... it just sits in one place, doing work things. My family would hardly last a month if everyone had to carry around physical keys to log in to things.