3) most people do not trust hardware wallets.
As you can see it ranges from 150 to 300 dollars and that's the reason mostly people do not know about this.
I don't see any point why they will not trust hardware wallets when they are one of the safe mode to keep your coins and the main problem with them is they buy/sell over these exchanges and have trust on them for keeping your coins which is more dangerous and can loose their funds.
But as you said it's expensive or we can say many don't have idea about how it works so they are keeping up the flow with the same old traditional way of securing their funds.
Before the collapse of FTX it is likely that many people do not even considered the idea of using one because they thought, why spend hundreds of dollars in one when you can just store your coins at an exchange and secure your coins for free? But now those people have their answer, if an exchange does not want to give you your coins back then it is going to be very difficult to recover them, while on a hardware wallet this is not even an issue as you are the one in control.