[dyn!o]

SmartCards usage inside dongles cannot bring anything powerful simmply because of SmartCards acrhitecture.

Nevertheless of the fact that SmartCard can block the access to their OS, file system and core, it is still crackable because they are too slow to operate as virtual machines. Even if they would, you can always decompile/decrypt encrypted/translated code (look at XProtector, StarForce) because each protection, before the protection takes place, inserts own signatures (markers) inside the software to be protected. Of course I mean nowadays common technologies.

The other fact is that SmartCard is nothing fancy nowadays. You can use ASICs and FPGAs (e.g. using a so called secure bit, like in Xilinx devices) to perform much more flexible and powerful protection, with less effort.

There is still a big, unused hole in software protections. It is not about anti-dumping, anti-debugging and bla bla... It is about creativity.