More questions than answers but there are no technical barriers. It's easily feasible to let the network hold the keys in a decentralized encrypted manner. In fact if you look up the research the Enigma project has done which leverages sMPC (secure multi party computation) and TEE (trusted execution environment), then it's fairly easy to hold a wallet in that way, using a threshold signature scheme. Not saying I would go with that approach but it's just to show it's not impossible.

The easier and more efficient approach is layer 2, and hardware locks. The issue though is how would you do it in a way which would benefit or provide ROI for Steem itself. You can do a lot of stuff with SMTs but the challenge is how to do it in a way which benefits Steem the most and what could that look like?