
Online validation is performed by Yubico's servers.After provisining a physical YubiKey the key record is "securely deleted" from the computer and the SD media.The Initial Configuration System receives key records from the SD media.The Initial Configuration System computers are physically and logically protected.

The operators are "specially authorized and trained".The Initial Configuration Facility is "sensitive to both theft and manipulation" (I assume this means that they have theft deterents and monitor the integirty of security critical components).


Using a password manager is better than not using one and is a simple, cheap solution to improve the security of virtually any application/service you need a password for. The question is: are the risks acceptable to you? Refer to a sample attack tree for defeating two-factor: After all, if RSA got hacked and the attackers were able to use this to get into military contractors then no two-factor mechanism is invulnerable. Yubikey, as states, could also be vulnerable. So yes all software can have vulnerabilities. Lastpass has had a XSS vulnerability and a suspected intrusion recently.

Who are you concerned would want your passwords? Opportunistic attackers or targeted governments / organized crime?.Are you storing the whole password in there or a unique value to which you add a passphrase?.What passwords are you protecting in Lastpass?.The complex answer: it depends on your threat model and risk appetite.
