Same problems
Physical security measures are often easier to overcome than digital, Google should know that. The problem with this method of authentication is that if someone possesses the token, they are assumed to be the user without additional authentication. In other words, if someone gets a hold of your ring, they can get access to all of your stuff. Now, this is partially solved by two-tier authentication, wherein a user has to register a particular device by filling out a secondary password, but again, this makes devices such as personal laptops that are currently quite secure much less so. All we'd be doing is switching out hackers for pickpockets as the primary menace to personal information security.
Let me just give you an example; A DoD contractor is given a work laptop. A thief steals his ring through any of the many ways that could happen. The thief now has complete access to all of his systems, without needing to know anything about computers at all. He doesn't need to guess at a password, because to the computer, he appears to be the user in every way that matters. The machine has been authenticated with that ring, no more work is required, and after copying the relevant info, the thief can ditch the machine, rendering computrace and other such systems useless. All that has happened is exchanging remote threats for local ones.
Realistically, the best security scheme is to use a password comprised of random words, as outlined in xkcd, that is automatically changed on a daily basis according to a user-set algorithm that's simple for the user to process. Here's an example that I've actually used in the past; I had a cron job that changed my email and online banking password every day. Now, take your favorite music playlist (could be anything else that's a list of words in specific numerical order), listen to the first song, you remember what song comes after that? Of course you do, it's your favorite playlist, you listen to it all the time. You probably remember all 20+ songs and which order they're in. My algorithm took the date, and reduced it to a single or double-digit number less than 20, like so; Jan. 27, 2013 = 1+2+7+2+1+3 (the numbers in the date) = 16. So the 16th song on my playlist was what my password was set to that day ('Chamber_the_Cartridge'). If for some reason I can't remember, I just check my iPod or phone, or hum through the songs in my head. But realistically I always remembered, because I listened to it constantly. Now, this gives me a different password every day, and I don't have to remember the password, just the list. You could do a specific word in a poem you memorized, or for two digits, two words i.e. in the Cadaeic Cadenza 1 and 6 = Midnights_Weary. Only need to know the first 20 words of that poem. Or lyrics in a song, just count the words. Anything you can remember more than 20 of. And voila, you have a password that is long, complex from a cryptography standpoint, changes at whatever frequency you want, but is very easy for you to calculate. All you have to know is the date, and be cognicent enough to do single-digit addition.
That's the best password schema. Easier to remember than Tr0b4d&oR or l3t_M3_1n, but much stronger, and changes constantly. You can even tell people your password without worrying, because it'll be different tomorrow. All you have to focus on keeping to yourself is the algorithm that changes it.
