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Is that an unreasonable expense for something like two factor SSH auth?

Yes.

And using a key like this isn't even two factor.

Most definitely. Not all people are made of money. $100 can buy a lot of things, so if I can't justify it for professional use, there's not much of an incentive to spend that much.

https://solokeys.com/ ?

$25 USB-C: https://solokeys.com/products/solo-usb-c?variant=23528357560... For those not familiar, solokeys was an open source project that became a company via kickstarter (and now indiegogo)

Assuming this is a business, you're already spending thousands per machine per user.

And a developer that's down for half a day from a failed key is way more expensive than that $10 of savings.