If hardware wallets became unusable, would confidence in Bitcoin weaken, or would people adapt with new storage methods? Is this even a possibility ?
It's an impossible and unrealistic fantasy, but if your hardware wallet stops working, you can definitely install it on a software wallet if you save the security of your hardware wallet.
It is impossible that software wallets will not stop working. If the total Internet system were to go down, if there were no Internet in the whole world, then all Bitcoins would probably become worthless. Just as it is unrealistic for the Internet to go down, it would also be realistic for hardware/software wallets to suddenly stop working.