> Currently, people who cannot use or rely on 2FA are getting locked out of their accounts even if they weren't hacked and knew their password! Isn't that worse?
I don't think so. You seem to presume the end state of both is that the user is locked out, which is only half true.
With a lost 2FA device, the user and everyone else is locked out of the account.
With a compromised account, the user may be locked out but the hacker is not. The hacker is free to impersonate the user to social services, hospitals, potential employers, etc. If there's no mechanism for the user to regain control of the account, the hacker will have that access until the user can contact all of those people and give them a new email address. That could take a while, especially if we're considering that the user has a high chance of not having a phone at the moment.