Yea in theory you wouldn’t need the password if you have the private key but here the key is only used for signing, maybe not for login. If it also needs to be backwards compatible. In any case, I don’t think user-held private keys is viable.
Sharing with trusted parties… I dunno, I think again it’s too technical and complicated to do it. And you’d need people on the platform you trust to already be there.
Normal non-technical people are never going to do this. It needs to be easy as clicking a button, otherwise it will never happen for them. Again, this is a neat technical solution but it completely forgets the human.