If you assume the strongest opposing argument, it's clear the "myth" isn't arising from a misunderstanding of cryptography. Rather, it's arising from the practi

If you assume the strongest opposing argument, it's clear the "myth" isn't arising from a misunderstanding of cryptography. Rather, it's arising from the practical observation that password managers are not perfect, and therefore encryption is often not sufficient. In fact, you offer this argument yourself in your comment -- it is really bad and dumb of LastPass, and yet it happened, because these things happen in reality. Exploiting bugs in the end-user web application, accidentally exposing unencrypted data, unnecessarily collecting all data in a single location in the first place, a break in cryptography leading to a total break of security are all failure modes that only affect cloud password managers.