I didn't mean because of the closed-source nature, or of the supply chain problem, though those are also issues. I mean how they are intended to be used is an unnecessary use-case. Your cold storage should be inconvenient to use, not impossible, but you should have to put some effort in before gaining access to spending it. For example, your savings account at your bank used to have withdraw limits. We have become accustomed to those limits being lifted, but it was in the interest of the depositor to have this limitation. The concept of keeping your cold storage seed in a secure element is contrary to it.

What is a secure element good for? Good question!

A hot wallet like a lightning node is a perfect use for a secure element. Even though the software could theoretically drain the funds at any time because it has access to the secure element, at least it wouldn't have access to the seed itself, unlike software wallets.

Once a seed phrase is entered into a computer, it should immediately be placed into a secure element and erased from RAM. This way it can not be read back out. Even better, the seed should be entered into a separate hardware wallet, and access to the key should be provided over a USB or physical hard-connection. A signing-session should be established between the PC software and the hardware wallet with physical-intervention authorization, akin to the nostr-bunker model. This way signing can be throttled and limited to the needs of the software that need access to it.

This model could provide some assurances of seed-privacy on day-to-day spending at L2.

When I say hardware wallets are a bad idea to begin with, I mean they are being used to solve a problem that shouldn't be solved.