[brokenmachine]

I don't understand what the problem you are referring to is.

That's a feature, not a bug. The government cannot hand over ownership of your btc. That's the whole point of decentralized.

The forgetting your password thing may be an issue for the person who forgets their password, but it is not an issue for the network. Those btc are out of circulation, sure, but there's lots more out there that people can exchange. Just don't forget your password and you'll be fine.