There's bigger problems here. On a trust based system when keys are compromised you have the key authorities invalidate the key then you rotate to a new key. As a matter of good practice you rotate occasionally anyways.

In crypto if a key is comprised you are immediately and irrevocably fucked.

So giving a high level authority, or even a set of them, the capacity to transfer ownership of a NFT without with "intended" owner's permission (as would be needed for eminent domain) crates a massive theft risk. Any system that allows that theft to be undone would obviate the need and utility of crypto.

Similar category here. Imagine if a bank with thousands of conditionally liened deeds has a ransomware attack and they lose their private key. Now their lien can't be revoked and those deeds are permanently encumbered and non-transferable.

The dependence on an unrevokable private key is the problem.