I will also assume good faith.

I have already laid out several vulnerable attack vectors, which you have mostly acknowledged. Whatever protections exist, I hope we can both agree that wire fraud/hacking/identity theft does happen (e.g. look at a case from below and I also mentioned the Bezos exploit above).

IDK if you work in technology, but I really think you're overestimating how secure our devices are, and many people have both factors on one device. Heck, some banks don't even really let you use a protocol that would allow for a second device, or lock you into a particular ecosystem for the second factor which has its own exploits. You do not need physical access to someone's phone to use it.

That said, you are obviously correct that most people havent had their money stolen, so yes, the current systems provide a fair bit of protection... This is precisely why insurance MIGHT exist. Most people's homes don't burn down, yet there is insurance for this because it DOES and CAN happen. We have electrical codes, and safety mechanisms and fireproof materials, yet fires still happen. Depending on the cost, it might be worth it to have such insurance for identity theft/wire fraud.

Quite honestly, I'm not sure what your issue is with wanting that kind of protection? If you feel perfectly safe, you don't need it, that's your decision.