While it's a shame so few hardware engineers have the opportunity to build hardware, I wouldn't say they are being wasted. I am a hardware engineer. I invented a couple hardware devices, but I transitioned to software very early in my career and I don't regret that. I don't feel my talents or education has been wasted - my understanding of how a computer works down to the transistors (planar CMOS, I'm from the 80's) is handy when I have to predict how software will behave (and how it'll ultimately break).

Engineers are, ultimately, problem solvers. Some problems are hardware - electronics, mechanical, electrical, production, and so on, but the space of problems we've been trained to solve is a lot bigger than that - If you can see feedback loops, you have a future in commodities, banking and finance. And, as we recently learned the hard way, in politics as well. We are all trained to identify sub-optimal solutions and to have an almost irresistible itch to solve them.

One quote I love is that "scientists see the world as it is, while engineers see the world as it could be".