The following is a guess, I can't speak for sure the true reasoning if there is one.
I think it's not that incubators and investors aren't willing to invest in hardware development companies but its much easier to:
A] Understand the software business as most investors/incubators probably have strong knowledge on software development than they do hardware development.
B] Prototyping, iterating, and testing software/web/mobile base ideas these days are much more low risk, quick development time, and relatively easy to measure results (rather quicker to test).
C] It's a very expensive risk to back a first time entrepreneur who is unable to prototype out some initial version of their hardware device themselves. Even most kickstarter projects (at least the successful ones I've seen) have managed to go out of their way to model a working prototype on their own.
D] This is probably the most likely answer... majority of the companies applying are very software/web/mobile centric. It's not that YC or other incubators are biased just like how they wish more women would start companies, but the market are mostly people focusing on ideas in the software/web/mobile space.
With that said, I realize it takes a lot more than 1-2 guys to prototype out an iPod, generally speaking. Afterall, Apple probably had a decent size team of experts working on the iPod for 1-2 years before the first product was introduced.
To be fair, there are some hardware base companies that did raise funding without a product but the ones I know of are usually backed by proven entrepreneurs (not saying that yet-to-be-proven entrepreneurs can't). Ooma is an example that comes to mind.
There are hackerspaces that do hardware development but I guess there just isn't as many hardware guys as there are software guys. Not to mention the barrier of entry is probably a lot harder (not just in time and cost but also in picking up hardware knowledge vs learning to program). From talking to my friend who graduated as an EE major, most hardware projects are very specialize and require multiple people to work on to produce where as software can be done with 1 guy building the prototype in most cases.