Everyone understood that these were categorically different from services such as accounting, engineering and law. Today, most software combines characteristics of products and services. You can buy software in stores. It has a physical existence on floppies or CDs. Still, it exists to perform a service.
Software performs accounting functions, engineering design and legal drafting.
No doubt, software has and will harm some people. Defective software may foul up your tax return, cause engineered structures to collapse, or mess up legal tasks. Or think about navigational software installed in airliners that, despite every imaginable precaution, fails and causes great loss of life. If navigational software is a service, its producer won't be liable unless the producer is negligent. If the producer took every imaginable precaution, the producer can't be negligent.