Not sure what you mean. By 'device' I didn't mean some special hardware developed by some special company, where the government can then regulate that industry. I just meant any computer. I'm saying that signing a transaction can be done offline on devices that are never connected to the Internet, such as an old laptop, or yes even a special device. There's no fundamental requirement to have the keys on your virus-ridden home PC at any time. This doesn't remove any of Bitcoin's advantages from what I can see.
And multi-signature transactions will allow for multi-factor authentication at a protocol level.
PS: Your also describing an adhock solution. As soon as you want to mass produce them to allow significant and convenient adoption you get into regulation issues. And by 'device' I am including just the software to manage your account from a cheap netbook.