[1] I don't see it as a real hardship for one already retired to choose to hole up and shelter. It IS a real hardship for young working families to loose their income, homes, and way of life because they HAVE to shelter.
The operative word there is "choose". Sure, they can choose to and be advised to make that choice. But in a public health emergency you need to be able to ORDER people to comply, and you can't force only those 60 and older to shelter in place. So it wouldn't work.
And besides, sheltering in place would not be enough to protect them - we would need to set up dedicated facilities with strict quarantine procedures, otherwise those people (I'm one of them!) would almost certainly be exposed by the rest of the population who would be circulating the virus, and getting sick with it.
And just because, statistically, those 60 and up are at higher risk, doesn't mean the disease can't be very serious and even lethal to those under 60... even MUCH under 60. There are increasing reports of people in their 30s and 40s being hospitalized with serious cases of the infection.
This is a true public health emergency and there are only two ways to deal with it effectively:
1. Isolate everyone (or the overwhelming majority of those) infected.
2. Isolate everyone, period.
To make option 1 work, you need to know who is infected. Stupid us, we don't have the tools to find out. So we're left with option 2.
BTW the issue isn't someday supplies... before the virus was identified, the testing kits didn't exist. But we didn't have the machinery in place to crank out the kits that were needed. I'm not sure of the exact reasons, but I'm sure it didn't help that we (I can't be more specific without violating the TOS) disbanded the federal office charged with pandemic preparedness.
Certain other countries were able to produce the needed kits and avoid shutting down their economies - S. Korea is the most notable example. That we couldn't do it, with the strongest economy and best medical technology in the world, is to our lasting shame.