Then if they've lost their private keys, they can't get access again employing their PoP.
And the masses will lose their private keys. Sheesh are you not aware that most people create a new Facebook account when they can't remember their password. This happens quite often, which is they they end using a password that is easy to crack using a dictionary attack such as "1234mydogSpot".
Of course, but this is no different with bitcoin and altcoins. Initially people will lose private keys and any money associated with them, but in the long run, people will learn from their mistakes. Third party solutions will come up, including storage of private keys. It will be a weighing of risk and benefit. People already use services like mint which store all their bank passwords.
In the long run, I believe such an approach is superior to adulterating a product in order to allow it to be easily used by the masses.