This is correct. A recent update to the account panel has changed it to using email to log in, and it's apparent that that is the way things are now.
The password reset failed because your email is not confirmed. When you log into your account panel, there should be a message there that reminds you to confirm your email. Try to confirm your email ASAP. This way, if you need to reset your password or have any other important notifications sent to you, the system will be able to do it with the confirmed email address.