It's not a case of 1st party or 3rd party for most users. Especially laypeople.
It's a case of 3rd party or none.
Most users are not going to piss around manually syncing KeePassXC or whatever.
3rd party makes it easy to use secure passwords. The alternative for laypeople is going back to what they do otherwise. Password re-use.
Yup, and ALSO makes it easy to SCREW UP. That's the point. This paternalistic garbage helps no one.
Right now, the smarter thing is to be like: "Look, passwords are hard. Security is hard, but individuals have to take responsibility" because entirely too many companies are bad at this.
There's also another simple solution, but no company is yet good enough to do this. Provide indemnity.
Being ignorant of convenience required and capability available of the target audience isn't going to help anyone.
Don't let perfect be the enemy of good.
A 3rd party password wallet from one of the majors is vastly more secure than someone's nan using the same password for everything. Which is the alternative in practice.
You seem to think that normal people are going to learn IT security to a reasonable degree, and be personally responsible.
Many people literally aren't capable of being what you want them to be.
Yours is a beautiful dream that clashes strongly with observable reality.
If people don't learn -- and maybe they won't, then, the only real solution is actual liability. These companies promise safety and don't deliver; time to sue or regulate or both.
But we need to stop pretending that "third-party," in all its present crappiness, is an acceptable option, even if sometimes it's better than what people do on their own.