[justinschuh]

Ars just put up a decent article with some background, and explained how to reset your recovery keys (even on the Home edition): http://arstechnica.com/information-technology/2015/12/micros...

I have a lot of sympathy for Microsoft here, given some professional history with Chrome's Sync feature. Originally Sync data was always encrypted locally with either your Google password or a custom passphrase, and recovery wasn't possible (well, practical) absent that passphrase. The result was a bit of a support nightmare, as people would lose their sync data because they changed their account password and forgot the old one, or upgraded their machine and had forgotten the password years before, because it was being autofilled.

To solve the problem we ended up changing the way we managed the encryption, so we could recover the data for the default case, and kept the custom passphrase as an opt-in for local-only encryption. That's not to say I think we did everything we could to promote and support the use of a custom passphrase, but I am thoroughly convinced that it's not something the majority of users are concerned about or want to hassle with. If the average user forgets their password they still want to be able to get their data back (and there's no good way to forewarn or explain away why it won't work).