<< Besides, hardware routers are much faster compared to software solutions. >>
For the $50 router this is not always the case. I agree that it could be faster than a machine running Windows and pretty much any connection sharing software. It would not, however, necessarily be faster than a machine running a version of linux such as LRP or Freesco. Even a 486 can outperform these cheap hardware routers. They are also infinitely more configurable.
For most people, a cheap hardware router is the way to go, but for someone who has an old machine lying around and wants to learn a little about linux, a linux router can be a very good option.
ttn1