There is an overwhelming amount of superfluous text in this article.
The author's solution:
> Rather than allowing a user to set their own password, passwords can be issued in exactly the same way as API keys are now: a high-entropy password is randomly generated by the issuing website, and the user is shown the password once only and asked to record it. If the password is lost, a new password must be generated using the same process. The user cannot choose their password, but can get a new randomly generated one in the event of compromise. The password essentially becomes indistinguishable from an API key.
The author's solution:
> Rather than allowing a user to set their own password, passwords can be issued in exactly the same way as API keys are now: a high-entropy password is randomly generated by the issuing website, and the user is shown the password once only and asked to record it. If the password is lost, a new password must be generated using the same process. The user cannot choose their password, but can get a new randomly generated one in the event of compromise. The password essentially becomes indistinguishable from an API key.