It seems like the benefits are having the device lock/wipe itself after a set amount of attempts in case of a brute force attack and not having to run software to decrypt the drive on the device you plug it into.
I included a picture of the IronKey Keypad 200 but that’s just because it’s the first result that came up when I was looking for an example. There seem to be a few other manufacturers and models out there and they probably have different features.
I am curious what do you think of them? Do you think they are useful? Do you find it more a novelty?
It was an ExplainingComputers video titled Very Useful Small Computing Things that made me think of them.
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If I understand Luks, the raw key is encrypted using the passphrase, so that is an ok scheme if the passphrase itself is too random to attack by brute force (unlike the 8 digit code that the Ironkey device uses). Look up “diceware” for a reasonable way to generate random phrases. Luks with this approach can be pretty good, though still potentially vulnerable to key loggers and other such attacks. Basically, put careful attention into what you are trying to protect against. High security commercial crypto (e.g. for banking) uses hardware modules in secure data centers, surrounded by 24/7 video surveillance. Check out the book “Security Engineering” by Ross Anderson if this sort of thing interests you. 1st and 2nd editions are on his website, use web search. Parts of the current 3rd edition are there too).