Yeah, this is basically my take. At this point, the idea everyone is converged on is that you have a locally encrypted secure "vault" of some kind, that you can trust, and you need to verify identity with that system, perhaps with a password and perhaps with a key. It is easier to have some trust that your password manager of choice is more secure, rather than having to assume that every service in existence you create an account for is secure (or unphishable.) So, by the time you use a passkey, you're quite often in a more secure context where you've already established that identity: to your operating system, to your password manager that owns your passkeys, etc.

It also seems likely that places that didn't support hardware keys now or recently probably wouldn't have supported them in the near future. But the ROI for a Passkey solution is likely much higher since the buy in (just some software support) is much easier for people to achieve. Of course, this is only true for websites mainly; a Passkey is basically the equivalent of "Standardized SSH keys" for a website.

I see hardware keys as more useful for second factors like actually unlocking your vault with your passkeys inside of it, which might also want a password. I suspect hardware keys still have a bit of life left in them.

The Passkey login flow is actually super, super nice now that I can use it on GitHub, Gmail, etc as a primary method.