It's not secure, it's not decentralized. Any system where you forget your password and you lose your life savings is not a safe system.
I agree with Solosanz, and I guess others (Who know about Bitcoin) will be agreed. About password, This is the reason almost every Wallet and software suggest you store your keys safely. If you cannot take the risk, You shouldn't drive a bike or car too. It has the chance of a crash, and you may die. What a non-sense theory.
When someone forgets his password and lose life savings, its not the system's fault, its his fault that he didn't remember it.
When someone can just reset the password after recovering from an administrator of a system, then that's what a centralize system is. Which is also what decentralized system were trying to eliminate due to the risk from administrator's judgement.