The reason why this attack worked is primarily because of a recovery system. I agree this is a significant vector, but I can't see how decentralized solves this?
At the moment with blockchain wallets, once you've lost your private key, you're screwed. There is no recovery.
So, I'm all for decentralized but if it is truly my identity, I need a way back if I lose it. Not sure how to solve that vector even in a decentralized case.
Do I need to upload my identity to specific 'verifiers'?