I see your point that hardware keys can fail, but that is a completely separate issue—print it out and shove that paper in there as well, redundant copies in multiple locations, etc... it is just a standard backup problem. The hardware key is about ease and safety when you are using it, not as some perfect storage.
In any case, the issue of securing something that you only want to use in extremely rare cases is still an issue—"nowhere" isn't a solution to that problem, although I can see the argument that hardware keys aren't the best choice of storage medium (although as an efficiency measure it could be useful to have one in there as well so you can go quickly if it works).
In any case, the issue of securing something that you only want to use in extremely rare cases is still an issue—"nowhere" isn't a solution to that problem, although I can see the argument that hardware keys aren't the best choice of storage medium (although as an efficiency measure it could be useful to have one in there as well so you can go quickly if it works).