Or have we (secretly) hated HW patenting all along, just as bad as SW patenting? Or is it just the current setup of the patent system that is the problem?
HW patenting isn't as bad. Let me illustrate: The PAL tv colour circuitry had essential patents, many owned by Telefunken. The Japanese competitors could not use these patents in their equipment, so they developed ways around the patents, and, ultimately, better televisions. Unless you're breaking new ground, you can only get a patent to cover direct copies of your device in hardware. One company slavishly copied the day/night car mirror design of another. I worked briefly for the copyists, and their legal advice was that they could copy the circuit exactly. They did. They could not copy the mechanical action, however, and had to avoid using an eccentric to do it. The problem with software patents is that applications of known techniques to new areas are patentable, whereas in fact they really are 'prior art.'
The disks are getting full; purge a file today.