"A third party OAuth provider puts you at the mercy of the service provider" This is they key issue with trusting a third party to manage my passkeys, they can also BLOCK them and lock me out. An exception is if the passkeys are synced to all your devices and cannot be remotely wiped. I think this is how Apple works.
I didn’t think of this in the moment, but you’re right, this is an even bigger risk than compromise. There’s regularly a thread here about someone getting locked out of their cloud accounts, and now we’re going to gate everything behind those same accounts? Horrible idea.