But it is much easier to loose your money to hackers than it is to people muggers or burglars. Being a software developer by trade I have growing distrust to software in general and software handling my money in particular.

If people truly understood the ramification of a completely cashless society, I think they would have no problem with some of the trade-offs.

Sure, if it's anonymous cryptocoins.

But I don't want the government able to monitor every $2 purchase I make.

Please state what all the positive ramifications you are referring to are. All I see is essentially some extra convenience in exchange for a probable privacy nightmare.

If they cashless society used Monero, or a fungible version of Bitcoin, sure. Even then though, it still excludes people without digital means - which is immoral.

Using cash is an option, if you don’t want to — you don’t have to.

Somebody likes getting rid of options.

They can get to prison, where options are carefully limited.