Any physical key that is easily copied is too easily compromised to be a serious alternative to passwords. Just think of the last time you left your phone on a desk or something while going to the bathroom.
There's an implied 'because' between these two sentences, which I think is problematic, since the first sentence does not necessarily follow from the second.
I couldn't care less about the second part, but the first is a great idea. When I visit the website in your profile, though, I don't see any mention of hardware, just software.
Is there more information available somewhere?
The hardware key is in private beta and will be publicly available soon. We have evaluated half a dozen smartcard technology vendors and are partnering with a couple of them, so we can deliver a key with or without FIPS certification depending on your cost consciousness and security requirements. Please e-mail me for additional info.