> Productivity-wise, MFA will work better than USB tokens - I know a bunch of people who regularly forget their work smartcard pass, I don't know many people that forget their mobile phone.
(Your terminology is weird. What do you mean by MFA where USB tokens aren't in-scope? I guess you mean an authenticator app on a mobile device).
Where I work, we use Yubikeys, which are used as 2FA for almost everything:
* SSO on all web internal web sites, the SSO implementation supports U2F
* short-lived (less than a day) ssh certs signed by Yubikey OTP
* VPN access authenticated by Yubikey OTP
Enrolling of yubikeys is self-service, and supports up to 2, and employees in critical positions can have 2. Re-setting the Yubikey OTP pin is mostly self-service, but you need to enter it any time you VPN or get a new ssh cert, so you are more likely to forget your phone at home than your Yubikey OTP pin.
> I feel like security gimmicks like these distract them away from fixing real problems and are, if anything, detrimental to security.
Many banks (especially in my country) rely on SMS OTPs. Some banks have OTP authentication for their websites on their mobile apps (but then if you uninstall the app, you have to re-enroll, which is quite tedious).
I would much prefer all banking sites to support U2F/WebAuthn, and hopefully that would also sufficiently motivate good support on phones for U2F/WebAuthn. If they allowed you to turn off any SMS-based OTPs (e.g. if they support recovery codes and 2 tokens), I think it would be possible to eliminate SIM-swap fraud (which is quite rife here ...).
And to be clear, I don't mean this in place of good password managers, I mean in addition to password managers. Defense-in-depth and all.