USB hub, anyone?

What if your whole computer goes down and you loose ALL your authorizations?

As you might infer from my original post, that has been more of an issue for me.

YMMV.

If it works for you fine. I have had awful experiences with them. I find the idea of having to add another uneccessary layer of complexity annoying. It adds cost and abither variable to mix. I had a hardware dongle once and it was a nightmare. Even the software version has been a pain at times, resulting in me just abandoning software.

If you are using a single computer that sits in the studio or at home and never moves then, yeah, dongles aren't the end of the world. However, some of us use laptops and some of us take those out to places and some us use both a desktop and laptop. Really not hard to imagine why dongles are a pain in that case.
 
We are talking an order of magnitude greater chance of being forgotten, lost, or stolen compared to a laptop not to mention the ridiculousness of having a USB hub dangling off your laptop if you need the extra ports just for the dongles (not unlikely if you only have two ports and are using an audio interface and MIDI controller). 
 
Imagine someone uses Cubase, Slate and Waves -- not an unheard of combination given the popularity of these. That's three separate dongles (assuming they keep the Waves license on a USB key to make them easy to move). Waves thankfully lets you use your own key so you can use a nice little low profile key but the Steinberg and iLok keys stick out like a sore thumb. Basic physics tells us that a leverage arm like that gives a nice mechanical advantage to the potential of a bump to break something or knock it out. Again, if you never leave the studio or your home, no biggie but some of us want to use this stuff on dark stages for gigs, on trains to get some editing done, etc.. 
 
Regarding the possibility of a computer failure versus the USB key, SSD failures are REALLY rare these days but let's assume it happens. Off the top of my head here are the licensing schemes for some of my favorite dongle free software:
- SONAR: No published limit on activations (just the EULA limitation of two installs at a time). Reinstall and move on with life.
- Studio One: 5 activations allowed at a time. You'd have to use up all five of these before worrying about downtime. 
- Eventide: 2 iLok activations with option of using either PC or iLok USB key. Best of both worlds since you get to pick whether you want to use the dongle or not. I keep my two activations on my desktop and laptop so if I did lose one system, I'd still have the other so zero downtime and I'd just have to deal with manually moving the license back and forth while dealing with support if I wanted to use it on both systems during that time.
- XLN: 2 activations with ability to easily remove an existing activation via the web site. No downtime, no need to contact support.
- Celemony: Allows you to easily remove an existing activation via the web site. No downtime, no need to contact support.
 
With the dongles, you also get the added privilege of spending your own money to support the vendor's licensing system. I'm not familiar with Steinberg's but with iLok ZDT you need to purchase two iLok keys (because temporary backup licenses that require the key are useless without the key) so that is $80 one time followed by $30 a year for the replacement coverage. Note that the replacement coverage only gets you 14-day temporary licenses while you argue with the different software companies unless you enable loss/theft protection and remember to run the iLok license manager every 90 days to phone home. I have to wonder how many people pay the $30/year thinking they are covered without realizing they need the backup key and the 90 day check-ins.
 
Maybe they don't bother you but dongles are a no-go for me. Cubase is just completely out of the question for me while they have the current system. Simple as that. Maybe if they used iLok or generic USB keys, I could rationalize it since I'd be using a single devices for different things but I'm really not interested in throwing in (and paying for) a third USB dongle that gets me nothing but negative value as an end user. 
 

Personally I see no problem with them in theory the issue, as has been pointed out already, is when theory meets practice.
 
USB ports tend to be in short supply no matter how many you have. USB hubs can help but you need to do a bit of planning to make sure that you optimise the available bandwidth. The use of a Notebook Computer accentuates these problems as they have less available ports and hubs need their own power source so are not ideal if you want to be truly mobile.
 
For those who use two computers there is the added issue of making sure that it is in the right place at the right time and then lot losing it when moving it.
 
Historically some users have experienced problems with hardware dongles being unreliable. I'm not sure what percentage of users have actually had problems but it is a common complaint. No matter how reliable they are now these doubts will always be there.
 
I just did the Cubase crossgrade and added Wavelab Elements, I had a spare USB port that I could use so no problems there for me. I always ran Sonar on a single computer so that restriction did not bother me either.
 
Not having used a hardware dongle before I had not positive or negative opinion, I chose Cubase, it came with a dongle, I installed the dongle.
 
Like a lot of the discussions here there is no universal right or wrong just a right or wrong for you (or me).

In an ideal world developers would not need dongles to protect their intellectual property from thieves. Sadly we aren't there yet, so most developers implement some form of copy protection. Hardware was popular, then it wasn't, then it was, then it wasn't... truth is I've yet to find a truly non-intrusive copy protection scheme.

Ironically, hardware dongles do have a benefit or two that software can't match. The one that I like is the ability to install my software on multiple computers at multiple locations and use the software wherever I am. That can be really handy.

I still wish people would stop stealing so developers could spend all their time and energy on their products, and I didn't have to deal with multiple copy protection schemes, but wishing seldom works.

I never thought of the loosing the dongle angle. God as my witness, I"m the guy who has never - not once- ever lost his keys, wallet, etc. For me, going tbrough the authorization rigamarole is such a royal PITA that keeping up with dongles & USB hubs is a small price.

I wish too that the world was such a place that one could just install the software and be done with it.

First off let me say great thread topic. Regardless of whether you've got a dog in the race or not, the responses are an entertaining peek into the human psyche and our ability to rationalize or make excuses for almost anything. Well done all.

Ok now on to it. Until this thread I never really thought about which side of this question I fall on. Now that I'm thinking about it I guess the best way I can sum it up is with a bit of joke that serves as an analogy.

I had a girlfriend once who used to bug the crap out of me about putting on a suit and tie to go out to dinner. I hate suits and ties. That disagreement was one of several issues that ultimately broke us up. So that gives some perspective on me. Then a friend asked me if I'd be willing to put on suit and tie to go on a hot date (i.e. involving sex) with Angelia Jolie. I said I'd put on a scuba mask, clown shoes and a tutu if that's what she wanted.

And so it is with dongles. People can say whatever they want about how they'll never use one. But if the software is attractive enough, most will suddenly decide its no bother at all.

And I think that is what makes some of the comments in this thread all the more entertaining for me.
 

They're not a hassle at all. It's just that a few people have reported bad experiences with them, but the vast majority have no issues at all. You plug it in, you're in business. The authorizing has come a long way. I have both ilok and eLicenser, and I've never had the slightest problem with either. Don't let that be a factor in your decision. And it does prevent piracy, which is a good thing.

The bottom line is that dongles are what keep most of the software companies in business. Sonar was heavily pirated for years. The bakers actually considered a dongle, but the backlash would have been huge if it was implemented, so they dropped the idea. Now, we have no Sonar. 
 
When the ilok was cracked a few years back, Slate plugs were pirated. Steven Slate gave out the figures that showed the huge drop in sales that month, over half their revenue evaporated, and it took a serious chunk of change out of their bottom line for that year. It took until the next year for their sales to rebound. Slate stated that if they hadn't overcome the cracks, there was no way they would have stayed open.