The hardware is still a black box and you’ll never know how it behaves in conditions you didn't test against.
Because what I said above might sound like black magic to anyone who knows nothing about the topic I will expand.
The CPU on which the software runs gets far more scrutiny than the obscure encryption engine on the USB stick. And it's possible to validate the software encryption with minimal effort. Verify the output with various software implementations of the same algorithm, ran on different CPUs. They have to be compatible and can't all have the same bug or backdoor.
An encrypted stick is impossible to validate by the end user. They have no access to the CPU encryption engine or the raw storage so can't know the algorithm implementation, or the output to disk format which is probably proprietary.