Saying hardware is a difficult/low margin business is a gross generalization. I am a YC alum who quit the web and software and now happily run a manufacturing business. I boot strapped the business and it turned a profit in 2 months. Less than 1.5 years after launch we employ 30 people and I love going to work every day.
This is a fascinating (but long) read - kudos to David Argentar for getting his startup off the ground - talk about dilligence, he just didn't give up despite some serious problems building his prototype and that inspires me.