The way that Power Store is defined is that orders are associated with users. This means that all orders must have a user association. If the user does not login then a new user must be created to associate the order with.
You cannot simply put the email for the user that has already made a purchase or registered, the user must also identify themselves with their password. The form at the top of the checkout page will not log a user in if the user exists, but register the user if they do not exist. If the user already exists then they must login first.
If the user does not know their password because it is one that you have created for them then they will need to use the forgot password page to retrieve the password.
If you want this to work with the way the checkout page is currently setup you would need to remove the validation on the confirm page that is checking to see if the user already exists. You would then need to set a new user id session variable that is not the regular one that is used because this would essentially log the user in with only an email address. You would need to use this new session variable for the user id in the code wherever the original userID session variable is referenced and does not have a value.
This can get tricky and would require a bit of custom coding to get implemented correctly.