Doesn't storing the "recovery seed phrase" for a wallet defy all logic?
Bitcoin's motto &quot;Be your own bank&quot; requires it that everyone takes responsibility over their coins. Bitcoin wasn't designed as an infallible asset. It instead aims to be something between a payment system (like SWIFT) and easily transportable gold.
If you think banks are safer than your home for money (that is, you don't want to take responsibility) banks are a better option for you.
What might make Bitcoin better for you could be an encrypted mnemonic seed system. There is no proposal, famous enough to make me aware of. It's definitely technically possible, and easy enough for Bitcoin techies to implement on their own.

The government seizes the paper and takes your coins?

Check out brain wallet. Who said that you needed a physical backup?
Though I would, instead, use a cascade of multiple hashing algorithms that I have chosen and memorized with their order, along with a passphrase that I have chosen. This requires less memorization.