Won't help. They still need their launchpad password.
If you can trust someone to hold your launchpad password in escrow, you can surely trust them to do the same with your encryption password.
In practice, I suspect you can just reset your launchpad password by email. So you have to rely on your ISP resetting your email password when you forget _that_. And that they don't go bust or disconnect you for using too much bandwidth making online backups :-)...
Yes, many people are likely to accept this service given the choice. But this is a pretty low bar to pass. We can and should do better.