Isn't AES-NI useless because now the key length need to be longer? AES-NI speeds up both encryption and decryption. The encryption is as secure as the time needed to brute force the decryption. Doesn't it mean that the application developers will just need to increase key length until the time taken is almost the same as without AES-NI?
No, AES-NI provides a hardware implementation of AES. Before AES-NI, anyone could have purchased a specialized hardware encryption device that ran AES in hardware. So having AES-NI doesn't really change anything. When key sizes are chosen, they must take into account that specialized hardware could be developed. So, the key sizes we use already take this into account.