If you enter your one-time password on a subverted system, the attacker suddenly has access to all your data. He only needs access once.
> Or you could re-encrypt the entire disk
Not if your system is subverted. Sure, it would appear to you that everything is being re-encrypted, but in reality the back door the maid slipped will be used to copy everything the next time you leave your computer behind. (this is just one scenario, the attacker could also weaken the encryption algo, ship your data out over the network, etc etc)
> You could also make the encryption hardware external to the main system
Perhaps, but this doesn't exist today and sounds awfully expensive to develop.