A hosted service that you log into can manage on-chain identity for you, but still make it possible for you to transfer identity management to another service, maintaining portability without needing the user to do key management.
First you claim blockchain can help with "hosed and portable". Then you claim hosted can help you manage on-chain identity and make it transferable.
While your first argument was plain wrong, your second argument is true, but unrelated to a blockchain: ANY kind of identity can be "hosted and portable": see email.