IMHO the thing that is holding back QubesOS is the lack of hardware acceleration for graphics - maybe now when dual monitor setups are getting popular this could be a workaround for the security considerations?
Even with all its drawbacks, there is something really nice about being able to run different applications over Tor, VPN or plain internet simultaneously, the ability to isolate non-safe binaries and being able to backup your VMs easily.
I wish a similar distro would be made based on KVM so that the standard kernel could be used. It would be great for compatibility.
Maybe someday AI-assisted killchains will be so widespread that Qubes is the minimal level for the (few?) still-local users of compute.
I would not have copied anything from dom0 to any another qube, the impact is low.
I also don't understand why it needs to show the dialog in dom0. If you have the option to handle attacker controlled input on the unprivileged side, you should do that instead of putting a lot of logic on the privileged side.
I think it's the "secure screen" that cannot be manipulated by the malware in a VM. I'd expect a password entry dialog to also be handled like that.