Everyone I know whose parents had their passwords had a second set of secret accounts, and felt like they had to hide things from their parents.
Case in point: I rented a room to a girl once (she was 19) whose mom came along with her to every meeting, and bragged about how her and her daughter shared an email address.
When I was at the house once after she moved in and her mom was gone, without even bringing it up, she was very proud of the fact that she had a secret email address, a secret boyfriend that her mom didn't know about, and a secret stash of "sexy clothes" that her mom didn't know about.
That right there made me realize the futility of trying to spy on your kids. Kids are smart and they see each other every day. They will figure out how to get around your technology and share that info with others.
As others have said, honest conversation seems to be the best answer. Just like before the internet existed.