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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.
Password Entropy = length * log~2~(possible_chars). So this would actually add 7*log~2~(10) => 23 bits of entropy, assuming the attacker knew that this section was numeric, or ~45 bits if they didn't.
For anyone curious: Current best practice is a minimum of 100 bits, or 16 characters assuming only letters, numbers, and special characters. The recommended minimum bits increases every year with computing power.
Thanks for the correction