That is precisely what these devices are designed to stop. The device has a private key stored in hardware in a way that it cannot be retrieved by software. When you use one of these devices you dramatically decrease your number of attack vectors because now the attack has to happen physically. Someone has to actually steal your physical key. And because this is your "second factor", if that happens they still also have to have your password.
Two-factor apps get closer to this, but they usually can be copied. For instance, 1Password can be set up to mimic Google Authenticator.
> I do want to know if this is purely marketing hype
This is most definitely NOT marketing hype. It is the current security best practice.