Certainly storing your key with an HSM is superior and protects against a slightly large class of attacks, but in terms of getting the same protection as salt+p

Certainly storing your key with an HSM is superior and protects against a slightly large class of attacks, but in terms of getting the same protection as salt+pepper was designed for (limiting the damage of a DB-only compromise), encryption, even with weak key storage, is superior. Adding an HSM is just ways we can improve that even further (which aren't really even feasible with the salt+pepper idea).