They can detect high value transactions and swap out the recipient’s authentic address for an address controlled by the attacker.

I don't think that's possible since the transaction would need to be resigned by the hardware wallet (and that should be a huge red flag to any user).

But still, no wallet if 100% secure and most of the issues you brought up are very real.

I personally prefer a cold paper wallet anyway, although it only works for storage and not every day transactions.

Last, if you don't mind me dropping a link to my article, I think that physical security is extremely overlooked; and no encryption is going to fix that.

source: https://www.xkcd.com/538/, licensed under Creative Commons 2.5

Security is a pain, isn't it...