Based on AV1's trajectory, hardware encode isn't necessary (though it is nice). The current encoder is a reference encoder. Now that the spec is finalized, expect significant speed improvements from production encoders (realtime likely won't happen until we get it in hardware though)
Hardware encode is required if you want things like video calls, camera recording and such to use it.
It isn’t required for content distribution platforms which aren’t realtime and the cost of encode is easily made up by hundreds of thousands of streams.
Anything running on a battery will need hardware acceleration
I strongly disagree with it not being required. I run a small social news site - AV1 is still prohibatively expensive both for the server and clients for software encoding/decoding. Without hardware encoding, the tradeoff for better compression ratios in exchange for massive battery use + very long processing times for encoding simply isn't worth it. In order to get AV1 out, I have to often process a h264 version of a video first anyway, just so the client isn't left waiting for their video upload to finish encoding. This means to support AV1 I'm not saving anything on the storage side. Even youtube only does AV1 encodes for extremely popular videos - it only makes sense to do at significant scale.
I love AV1, don't get me wrong, and I can't wait til I can switch over to it as a single unified format for both images and video, but for now the cost is too high until hardware acceleration becomes ubiquitous