It seems crazy to me why anyone would store such large amount of assets in a password manager
that is widely known to have serious security issues. Do people not read the news?

I would never use a Ledger again for the same reasons: Ledger is not only closed source but also suffered data breaches in the past.
Ledger was the first hardware wallet I ever used back in 2018 but switched to Trezor last year due to Ledger's widely reported security problems.