Hardware stabilization is better but it takes space. For pure software stabilization, it can be done by PC or powerful smartphone so it's better to not to have on glass frame for saving battery.
Whether or not it is better depends entirely on what the end images look like and how important the pictures are. If it’s meant to act as a camera to snap and share the fun you are having, then it might be a real turn off if it is noticeably worse than your smartphone, which does have hardware stabilization. If customers stop using the camera on the device and reach for their phone to get the best possible picture, then the glasses lose 1/3 of their major features in the eyes of the customers, and it makes it harder to justify the price.
I’m not convinced software correction is enough, but maybe it is fine. It just depends on what is possible, what matters, and how much people are willing to pay for it.
