Overall, Google has made a major push for account security over the past few years. And to be real it's for a very good reason as most of these accounts are linked to Gmail with which a compromised account could be devastating for the user.
Forced two-factor authentication and passwordless logins are the future and as you said they will not work with Channel's existing, non-interactive TVE authentication system.
The end seems to be near for unencrypted TVE and I can't imagine the Channels team is going to take on the legal risk of providing a paid-for, native solution for stripping DRM from TVE content so I wouldn't blame them for bailing on the TVE idea entirely.
CableCARD support is ending and DRM protected OTA content is on the way. It's sad, but a clunky HDMI device might end up being the last remaining way to get premium content into a personal DVR.
And of course at the end of the day none of this will do anything to prevent piracy lol.