Good point. If the whole network does down then you need a plan B.
But if the user can still reach the login screen / negotiation, then it is a good idea to have a plan B available to cover the time interval until SSO is available again for those who do want to login in that interval.
In such an unlikely scenario (loss of cabin pressure etc...) it is IMO best to resort back to passwords as that excludes any other failures.
Such services can also be useful if the SSO solution does not support scenarios where passwords are requested because SSO is not negotiates (eg. transporting) -> customer can request a "one time password" from such a service to be able to perform the task. You can even attach the authorizations to perform the task to the request for the password, and have workflow approvals inbetween.
Lots of points of failure....
Cheers,
Julius