I guess he just does not prioritize account recovery. I understand his reasoning, since losing your account is, in most cases, your fault.
I still don't think that it justifies putting them on standby indefinitely. Everyone makes mistakes, and those people got hacked because of them. We're not a perfect society and forcing people out of their accounts on this forum because of their blunders in the past is way harsher than it needs to be.
IMO hiring a staff won't solve the problem since i'm sure there are too many cases to be handled by 1 person.
Surely once we get past the backlog of hacked accounts, the influx of them can't exceed, say, 20 or 30 a day (which is quite an overestimation just to emphasize my point). That number would comfortably be checked and restored within an hour. An hour of work per day can, again, comfortably be put onto one semi-dedicated person. All we need is some extra work in the beginning and this issue wouldn't even be an issue.