Password managers solve password reuse but create a catastrophic single point of failure

You use 1Password or LastPass to store 200+ unique passwords. Good security practice. Your entire digital life — bank accounts, email, medical records, investment accounts, work systems — is behind one master password. If your master password is compromised (keylogger, shoulder surfing, phishing the master vault), an attacker gets everything simultaneously. If the password manager company is breached (LastPass was breached in 2022, exposing encrypted vaults), every user's vault is one brute-force attack away from being opened. So what? Password managers solved the password reuse problem but created a worse problem: total digital identity theft in a single breach. Before password managers, a compromised password exposed one account. Now, a compromised vault exposes every account. The LastPass breach exposed vault data for 30+ million users. Vaults encrypted with weak master passwords (which LastPass did not enforce minimum strength on older accounts) are being actively cracked. Users who followed security advice ('use a password manager!') are now more vulnerable than users who wrote passwords in a notebook, because the notebook cannot be remotely stolen by a nation-state hacker. Why does this persist? The password manager architecture is inherently a honeypot: a single encrypted blob containing every credential a person has. Better alternatives (passkeys/FIDO2) exist but adoption is at 5-10% because every website must implement them individually. The transition from passwords to passkeys will take 5-10 years, during which password managers remain the best bad option.