Why don't we see more online wallets based on username and password?

It's a simple thing, most web2 business rely on an email and password as the login details to access their services.

Why is that not the case for crypto? Why more people aren't using some sort of online wallet with a username and password?

Most wallets rely on a mnemonic. It should be fairly simple to encrypt a generated mnemonic with the user password so it's always hidden and not at risk of any breaches.

Such online wallets exist but they could go even further and have a type of customer service that detects suspicious transactions and requires the user to approve transactions.

Billions of dollars lost in crypto could be prevented with extra security features where third parties can protect (with your consent) your transactions with real people behind wallets.

Just some ideas.