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not loving the liveness requirement
Yea that's the trade-off with all this sovereign internet stuff. Same as Lightning, sovereign identity needs a sovereign identity server just as sovereign payments need a sovereign payments server.
Biggest decision I have yet to make on it is the transport. Nostr is paradoxically not a good fit for this because of the size increase of the response event nesting the signed event. Need to investigate what compression or returning the signed event as binary might achieve. Having the signer do the actual emit could have security implications since it couldn't be in a militarized network, and the client UX/DX could suffer.
How we used to solve this in the field is with SAMs / secure applets (that implement counters, limit capabilties through x509 scope, short duration certs that are reissued frequently) but x509 is terrible to implement, especially bespoke-ish on nostr as you'd need to do it on the client (because giftwrapping) and since it's 99% quality poverty on the client implementation side, results will be even more variable as they are today.
So I think that despite not loving the liveness requirement and profile of a centralized nostr key, I do not see the alternative being feasible in that space - you may very well be right.
Looking forward. It'd be awesome if I don't have to waste time writing a signer from scratch.