First things first. There is no such thing as password recovery. Only way to regain access to an account you've lost keys for or locked them and can't decrypt them is to set new keys for the account. This would require Owner key access.
So my first thought would be auto-setting an extra owner-key belonging to a trusted account that would handle such requests by resetting keys...
Not sure thats a very good idea though.
However, since steemit has done it, I guess we only have to look at their code (steemit only uses the equivalent of "cloud" accounts though...not wallets)