Because software wallets have a host of problems that hardware wallets solve. A hardware wallet is like a dedicated offline computer, which is exactly what people need to run safe wallets. I bet you 99.9% of software wallets running today are on computers connected to the Net. With software wallets, you have to constantly worry about malware / trojans / keyloggers etc.
The thought of losing / corrupting / having their wallet stolen puts lots of people off using bitcoins. And so it should.
Maybe the 1st Gen hardware wallets won't solve all security issues, but they will reduce bitcoin loss substantially.
As for price, it will be a very competitive market. There is no reason to think hardware wallets won't be knocking around for under $100 in 2014. Heck, you can build a functioning bitcoin ATM machine for a couple of hundred bucks. There is no reason for hardware wallets to be expensive.
You want to tell me that the hardware wallet runs secure on an infected system, even with a keylogger installed?
Besides Bitcoins I own 5 other alts. Against theft and fire I have distributed my backups to at least one other location. Hence I will for sure use software wallets in 1 1/2 year and much longer. Security is never easy.