This is hyperbolic. There are many insured custody services for cryptocurrencies, similar to fiat banks. Secure storage is a big topic in the crypto space, and it is certainly not a goal of cyptocurrencies to weaken protection mechanisms (centralized or otherwise).
Argument for big blocks: Faster and cheaper transactions (lower fee), as well as more transactions per second. Can use more like cash, i.e. Bitcoin Cash. Everything should be done on-chain. They also argue that small blocks are a money grab from Blockstream so that the network is forced to adopt layer 2 solutions that Blockstream develops.
Argument for keeping block size the same ("small blocks"): Larger blocks means more hard drive space and bandwidth are required, and mining becomes more centralized based on those increased requirements. Big blocks are a money grab from the miners, since they make more money on bigger blocks. An additional concern is if the availability of hard drive space will increase in line with the growth of the network. They suggest to use the Bitcoin Core network more as a settlement layer and a store of value, and not everything needs to be on-chain. They suggest layer 2 solutions like the Lightning Network to use Bitcoin more like cash and enable fast transactions, as well as increase the number of transactions per second. I understand the Lightning Network has some caveats, but from what I've heard from institutions like NYDIG and Strike, that are already using it, it is already working as is.
All I'm saying is maybe it's not just a small problem. The decisions affect a global network and some of the decisions were said to potentially cause major problems.
The point is that there are much bigger problems in a worldwide currency than block size. In comparison, block size is small potatoes. And the block size problem split the community into two that hate each other. They don't just disagree, but consider the other side to be actively sabotaging the system.
You are right though, it is a bit ridiculous. What would you have them working on instead, just wondering? Fixing the environmental issues? Adoption? What else?
In other things in life, there are things like consumer protection. You can tell your credit card agency to refund you, you can use the judicial system to sue scammers. If you lose login secrets to your bank account, you can call the bank, they know who you are, the problem can be solved.
Crypto currency is designed from the ground up with the goal of eliminating all such centralized power and protection mechanisms. Anything that goes wrong is your fault and you have no recourse, and that is not a flaw that will be fixed, that is the most central thing in its design.
Society has protections for the weak, crypto is designed to remove those protections.