Luckily, FIDO2 can fix a lot of these problems. People who don't have significant security needs can use a trusted service (currently Apple, Google, and a few small companies) rather than a physical device. Lose your phone? As long as you can get your account onto a new one, you can still access all of your stuff.
Once this type of auth will take off, I can imagine a business model for a FIDO2 company that focuses on customer service. The only problem with the system right now is that if you can't log in to your Apple/Google/whatever account, there's no recovery. Try contacting customer support and see how long it takes until they just block your number, because there is nothing they can do.
Having a business where you can go to a physical office and show up with ID so you can get your account back would solve this problem. Recovery would still be a massive pain, but it's better than spending years on a legal battle like some people trying to get their pictures back from their cloud providers after getting locked out.