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It seems like the benefits are having the device lock/wipe itself after a set amount of attempts in case of a brute force attack and not having to run software to decrypt the drive on the device you plug it into.
I included a picture of the IronKey Keypad 200 but that's just because it's the first result that came up when I was looking for an example. There seem to be a few other manufacturers and models out there and they probably have different features.
I am curious what do you think of them? Do you think they are useful? Do you find it more a novelty?
It was an ExplainingComputers video titled Very Useful Small Computing Things that made me think of them.
Like most things, it's important to remember what threats you're trying to protect yourself against.
Are you trying to protect yourself against dropping a USB in a parking lot and someone picking it up? Or are you trying to protect yourself from a nation state?
Just my opinion but I don't really like the common belief of separating nation and non nation state actors. We're getting to the point where nation states are making up a large portion of the really damaging attacks, and it's frequently ones own government or a government they're in conflict with which means there are very kinetic consequences for failure even if you're a nobody. It's not just someone stealing some money anymore.