Soft I/O usually refers to data that is transferred over a network, or internally in a control system. This would be I/O (traditionally analog or digital signal) that may be wired to one system, but required in another system, so instead of running hard-wired to both systems, a network is installed to transfer the information.
Hard I/O is I/O that is physically connected (hard-wired) to an I/O card on the control system.
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This is normally the space where people post something insightful.
Instead of soft I/O, virtual I/O is a phrase that I might use. This could apply to any internally calculated value, peer-to-peer communication, serial link data etc. other than addressing the value of a physical input/output signal.
On top of the definitions above, another company, XiO, defines Soft-I/O as the ability to change the configuration of a hardware pin by using software. Their product allows any pin to be re-configured as a 4-20mA, -10V-10V, 0-24V, digital I/O, Thermocouple and more by just configuring it in the device's web site.