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If your computer is owned, your wallet is at risk.

So it's the perfectly strong and open wallet tech that's the problem, not the stubbornly refusing to actually do anything to open up and fix the closed computer and software business and to educate the users brain along with it. Right.

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This appears major problem for the widespread adoption of bitcoin IMHO.

Cryptocurrency has far greater adversaries and open technology challenges to solve than any sort of direct user issues.

modulo hype.

FUD.

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Fixing it appears to contradict decentralization, which opens another can of "worms".

Potential approach is to use "trusted wallet proxy", but this may not work in practice.

They're called storage / banking / service / insurance / payment corporations. Users are free to proxy their wallet safety / reversibility needs through one or not. Others are free to blockchain and whatever new tech advances come around that thus helping avoid third party cost / risk. Tech is one thing. Personally educating users is also your responsibility as creators of said tech. Eschew that and your tech vanishes regardless of how comfy it is. At least you chose name "wallet" which users have natural desire treat similarly, imagine if it was called "keep your digital encrypted dataset repository safe".

The Bitcoin community has bought into what might be called the "security of the chain" fallacy - that the security of the chain is more important than the security of the users.

Security of both are reasonably well known. Acting accordingly and fixing weaknesses within each is different story.

WYTM

Major one often is FUD, resistance to change, head in sand, anti progress.

Since early days, hardware wallets, cold storage and multisig have been proposed. But these are hard to use.

FUD. Learn to use, integrate and teach them. Banks / Rulers are no easier, and redistribute significant fractions through massive financial games, far more from users over time than any new crypto hw / storage / multisig, or even legal escrow storage service costs, or the occasional small amount compromise of a given daily use personal device.

whatever design you come up with, there needs to be some reversibility built in at some point. Which kinda flies in the face of raw blockchain. So blockchain needs to compromise, as do the people.

Typical... given a new strong groundbreaking world changing technology, and try to dumb it down, make it revert, comply and conform to the old stone age ways and the whims of rulers, instead of making the mental leap and other fixes needed to grow past the old.