Sorry, that doesn't make any sense. The specific use case here is unboxing a new phone, logging in, and having access to all of your standard networks without having to look up your wifi passwords. Clearly that has value to anyone who has ever used a new phone.

But to get to your core point: unless you have an amazing memory (unlikely) or reuse passwords (not unlikely, but, to borrow a term, "idiotic") you have to be storing those passwords somewhere. Password escrow certainly counts as "backup" by any normal definition of the term, although it has some extra requirements.