I wouldn't trust a hardware wallet since the hardware can fail. And without backup the money would be gone. And with backup we are back into paper wallets, offline hard drives or MtGox again.

If ordinary banks, PayPal and Visa etc would accept cryptocurrencies, then that would work for ordinary people. There is a great risk however that this will not happen.

An alternative is that new cryptocurrency companies can become trustworthy enough to replace ordinary financial services like banks, PayPal and Visa. But then there is the messy problem of legal regulations.