It confuses you because you are a technologist. For 99.99% of the world, user@domain == email address.
"Sign in with your email address" gets the point across. "Sign in with your user identity at a controlling DNS authority" may be more accurate, but will actually confuse everyone.
"Sign in with your email address" gets the point across. "Sign in with your user identity at a controlling DNS authority" may be more accurate, but will actually confuse everyone.