You don't really need a blockchain unless you need to keep data on a blockchain. To login and identify a user you can simply sign a message. I consider the address as the user "identity". Any blockchain data related to that address is mean to be public (some people register <some-name>.eth on the ENS for example)
If it’s just cryptographically signing things we’ve had that ability since PGP came out.
The reason is the UX/UI flow, complexity for integrating them and users which already have it.
So if all people have a wallet at some point which they also can use for SSO that might get adoption.
Through for investment into crypto, instead of "daily using it" you probably don't want a hot walled on your phone.
So as long as "daily/frequent/casual crypto usage" doesn't become a supper common thing for large parts of the society (in the "western" world) it's hard for it to gain wide spread adoption I think.