Most people re-use one password for everything, fact of life. Its not going to be an issue for the majority of people as they aren't going to forget their only password. Plus every single service we use has a username/email/password combo. People figure out ways to work with that. This is just another one to add to whatever system they use (whether recycling passwords, writing them in a book, using a password manager or memorising them).
The app also failed because no one used it since the QR codes were nowhere to be found, and places that did have them were a mix of the GOVT app and 3rd party ones that weren't compatible. Now that they're requiring all businesses to display the official GOVT ones, people would be able to use the app at more places and hence more likely for the app to succeed. I don't think the app has been 100% perfect by any stretch, and I'd love to see some things done differently, but they're making progress which deserves credit and trying to create problems where there isn't one just isn't helping anybody here.