Yes, it requires users understanding that the seed holds all their money. I think that is fine, it's not the best UX but the alternative is giving up custody which as we've seen time and time again means losing all your money. 

benthecarman

bitcoin

Seed Phrases are Sharp Edges

k00b

Also the problems with seed words cannot be so easily dismissed. It is a horrible onboarding experience for a wallet. And, it is not as simple as "just write down the 12 words." You then have to figure out what to do with those. And if you don't create an elaborate design, you have a ton of security holes.