So it's the transformation to a physical "thing you have" that is valuable? Would you say it is any better than a physical one-time code generator? Again, beyond the PITA argument; having used both I completely agree that the card was a lot easier.
Definitely that, and the fact they cannot be copied. OTP fobs offer the same convenience but are based on shared secrets that can be stolen from the server (happened to RSA). With PKI your private key is only on your smart card and nowhere else.
