They as in an attacker? But the user is offline. Explain more please.
local storage can be read using JavaScript from the same domain if you control all the JS on the domain, then this shouldn't be a problem. But if any other code is executed (i.e. via injection), they will be able to access the local storage
Nobody here is saying that an attacker can easily access your domain's localstorage, but just expressing the sentiment that "storing plaintext passwords is bad in almost any case".
Just like you can store plaintext passwords in your application database, and theoretically they are safe, but if a bad guy gets in your users are screwed, not just on your site but on others.