* Its value prop is poorly explained. As an engineer with a CS degree, I still barely understand what it's talking about (what's an "identity attribute"??) without some digging.
* Even if the value prop was well-explained, it's still very high friction compared to "Sign in with <Service I Already Use>". Why would a user download an installer and deal with managing all of their accounts? There's a secure, anonymous, easy, centralized option that does it all for you (Sign in with Apple). That service does it so well that you only have to click a button to log in or sign up. Nothing else required. That isn't achievable without a central authority managing everything for you.
* (this is the big one) Your local machine is a major point of failure. If you lose your local machine and haven't backed up your accounts, you just lose access, right? The only solution is either set up a server with periodic backup (too much friction for regular users) or a centralized authority that stores them for you, which defeats the purpose of all of this.
This project, to me, falls into the "cool technical stuff category". It's obviously built for "geeks" (lack of a better term) and not for people. That's why centralized tech co's will probably always do this better than open source. They are customer focused just as much as technology focused.
Unmonetized open source projects tend to focus more on technology than user experience. That's why you see regular people using monetized software and developers using open source to build monetized software.