Someone breaking into your password manager is a lot less likely than someone breaking into one of the dozens or even hundreds of services you probably reuse passwords on.

Exactly. Without a password manager, every single service you have reuses your password on is a security risk, because any one of them will compromise the rest. And it has repeatedly been demonstrated that even large software companies don’t follow best practices regarding passwords. So any one of them being compromised is a risk. With a password manager, as long as it is properly encrypted and secured with a strong master password, the only point of attack will be your master password.

It’s less about keeping all your eggs in one basket, and more about reducing attack vectors that hackers have access to. With reused passwords, every single individual service is a potential vector of attack.