It's especially insane on OSX which already has an OS-wide and ~secure (more secure than this anyway) password manager: Keychain.
security find-internet-password -g -s news.ycombinator.com
As others said: don't let anybody use your computer if you're logged in (have the keychain(s) unlocked).
That's insane too then! as it suggests/teaches that keychain passwords are master password protected.
On the other hand: if you in a third party app you just click "allow" and the app can use that password. Let's read that again: an arbitrary third party app … has access … to a password … by just clicking a button. You have probably done this many times (if you're using a Mac), but without thinking much about it (convenience).
Obviously there must be a way so that everyone can write a little app, request and access a password with a single mouse click and then show it in plain text.
(Always under the assumption that the keychain is already unlocked.)
It's possible to require the master password for each password release, though that is not the default and — in 10.6 — it seems there is no way to enable this globally, it has to be set individually per password as far as I can see.
I note that it's misusing keychain: if it's given (temporary) access to a password it will copy it to a permanent access entry.
> and that you can dump the complete keychain data with all passwords decrypted via terminal anyway.
Interestingly annoying, thanks.
If you "Allow" when Chrome prompts for access to a keychain item it then creates a new keychain item and gives itself "always allow" access.
Someone that does that to me would not get a punch in the nose, but that is certainly what they would deserve.
Regardless, what you suggest is an enormous invasion of privacy.
How about a, "Did you know that within 30 seconds, I can see all your passwords?"