That total incapacity for recovery only exists if there is personal custody. If you lose your password to an account at an exchange house like Binance or Coinbase, it's a completely different scenario, because those exchange houses have your private key for you, that's what custody means. So, you can recover your account using traditional account recovery methods.
So, in short, you are insinuating that people should use custodial means to hold their coins? Also this is entirely different from the title of your topic which is about private key and public key explained, and not about in difference to exchanges.
Exchanges have their own downsides which can not make me use exchanges to hold coins.
Some Bitcoin users had also lost their interests of self custody with their funds which is one of the reasons Satoshi had to invent Bitcoin just to create an atmospheric conditions that individual users would have the privilege to control their funds through which, users are in charge of their seed phrase without haven to trust it in a third parties custody.
Instead, how to spend the money easily is what they finds more interesting as the exchange is Centralized. Until such users falls victim, they won't know the risks in giving your exchange the right to hold your recovery keys.
Of course that is pure loosing of self right because the exchange will also have to decide your means in the space.
Exchange is never advice able to be used in holding your coin for long because it can be risk to lost right and accessibility of your privacy and funds.
