Apple solved this by supporting local backups. My phone backs up to my computer. When I restore to a new device, the backup goes with it.
When I set up a completely new device -- which happens only once every couple of years -- I set up WiFi again. I've never, ever, ever thought "oh wow, setting up WiFi is just So Hard! I wish Apple would store my private WiFI password on their servers by default without telling me first!".
iCloud backup does store your data on Apple's servers, but it's opt-in, and it makes it quite clear what will be stored.