Having encrypted data I wouldn't say is disproportionately prioritising protection over losing it in another way. The person simply forget what was a long password, something that most security conscious people would have figured out by storing it in a password vault.
However I do agree that "going alone" with security can make us the victim of our own fragility. I can see this happening in the new blockchain world of decentralisation. If I lose my Bitcoin wallet or lose the password, who can I speak with to validate my identity? Nobody. Currently, I can go to the Bank and validate myself with other forms of ID to access my account, but with Bitcoin it's all on me. Imagine losing your entire life savings because you forgot your password or access to your email account.
This is where centralising certain things works for the overwhelming majority of the population. That's not to say that those systems work perfectly, but they are vetted and have laws and regulations to protect us.
Sure it does if you use redundant storage like cloud. Of course that also has downsides, but I find encrypted cloud backups a solid solution. I personally use pass + encrypted git backups with 3 yubikeys (1 primary, 2 backup, all of them using ECC ciphers for encryption and auth).
However I do agree that "going alone" with security can make us the victim of our own fragility. I can see this happening in the new blockchain world of decentralisation. If I lose my Bitcoin wallet or lose the password, who can I speak with to validate my identity? Nobody. Currently, I can go to the Bank and validate myself with other forms of ID to access my account, but with Bitcoin it's all on me. Imagine losing your entire life savings because you forgot your password or access to your email account.
This is where centralising certain things works for the overwhelming majority of the population. That's not to say that those systems work perfectly, but they are vetted and have laws and regulations to protect us.