Yes, handling private keys is very inconvenient. I also can’t imagine my mother (although rather tech-savy for her age) handling all her financials with crypto wallets.
However, one of the next Ethereum upgrades (ERC-4337) will make it possible to safely recover wallets without a key seed phrase. Its implications seems to be huge but I am not deep enough into it to explain how exactly it is going to work. Perhaps somebody more competent than me can elaborate on that.
You can't eat your cake and have it too: Either you are the only party controlling access to your accounts – which then necessarily includes the possibility of losing everything – or you don't, in which case somebody else does.
This isn't a tradeoff unique to cryptocurrencies: Cash works exactly the same way (qualitatively, if not quantitatively, in terms of the risks of losing access to it) – if you store your life savings under your mattress, they can be stolen easily or burn down together with your apartment.
This is never going to happen, and nor should it. Any system that you can lose your entire life savings without any recourse by forgetting, revealing, or being hit by a wrench, for one number - is irreparably flawed and extremely unsuitable.
However, one of the next Ethereum upgrades (ERC-4337) will make it possible to safely recover wallets without a key seed phrase. Its implications seems to be huge but I am not deep enough into it to explain how exactly it is going to work. Perhaps somebody more competent than me can elaborate on that.
https://beincrypto.com/learn/erc-4337/