So their vision of the future is that to do anything online, one MUST have a phone (ahem, portable wiretap)? And they're going to be keeping my secrets for me, for my own good? I'm not sure I'm down with any of that.
It's literally the opposite. You "must" have a cryptographic device (a dongle) that is only doing that one thing, authentication. Doesn't have a built in radio (unless for NFC, if you want it), doesn't have any microphone or camera, doesn't store any data beyond what's needed to authenticate, doesn't communicate except to authenticate - bi-directionally, so phishing is no longer a thing, or at least it's a lot harder…
With username and password, I have full control over my privacy in a very easy to understand fashion: If I randomly generate them I know I cannot be tracked (as long as I ensure my browser doesn't allow it by other means).
With those keys I have a opaque piece of hardware which transfers an opaque set of data to each website I use and I have NO idea what data that is because I do not manually type it in. I need to trust the hardware.
Sure, I could read the standard, but it very likely is complex enough that it is impossible to understand and trust for someone who has no crypto background.
And I also have no guarantee that the hardware obeys the standard. It might violate it in a way which makes tracking possible. Which is rather likely, because why else would big tech companies push this if it didn't benefit them in some way?