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How is that seed any different from a password then?

It never comes into contact with the memory of a network connected system, therefore putting it beyond the reach of phishing or malware thus solving the overwhelming majority of risks actual passwords are exposed to.

For one, it's only ever seen once: during initialization.

In addition, I believe it is not stored on the device. So it can't be exhilarated.

I, too, find devices prevent exhilaration these days.

Seriously, though, paper is better for most people that managing device cloning or the like. Most people can have a notebook in their house as a backup-of-last resort. Asking folks to become HSM managers seems unlikely to lead to better outcomes.

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