Authentication Is Largely Solved. Authorization Isn't

For working on a single computer, I think capability-based security with proxy capabilities is helpful for both. This won't do alone; however, you can add a user account database and you can handle permissions made out of such a capability-based security, which can be flexible because each process can have different permissions, and with proxy capabilities it is possible for the permissions to do things other than the fixed set of permissions.

For working on multiple computers, I think X.509 certificate chains is helpful for both. You can check that the user can authenticate with the key in the end certificate, and can look in the certificate chain for a recognized authority and know what permissions it has, and then check if the required permissions are granted either by all certificates leading to and including the end certificate, or only the end certificate, depending on the type of permissions (e.g. extended key usage might only be needed by the end certificate, while such things as what files it is allowed to access and how it can access them must be permitted by the entire chain in order to be granted). Extensions can be added to specify any additional details required by the authorization and/or authentication needed by your application. (The use of X.509 certificate chains also means that you would not need API keys, nor passwords (the private key can be passworded if you want to, but the server never sees the password, and therefore cannot steal it).)

In practice, operationally, none of this is solved. Every website/app/platform handles logins differently. Some are still doing SMS 2FA, some still do passwords, some implemented passkeys in the wrong way, some are doing app based MFA, some are doing magic links, some are doing email codes.

You can't in good faith say this is "solved" when it's just more complicated than ever, and the UX is terrible (passkeys, cough)