Yes - I was surprised there is an option called 'Show Passwords' - especially as it's available (not locked) by default!
I was shocked that anyone passing my PC (it's in a home office so I haven't got a personal issue with this!) can display in clear text all my saved userids and passwords just with a couple of clicks.
I've just been doing some reading and it look like this has always been this way!
As I mentioned I'm not a FF user day-to-day.
I appreciate in IE you can read the encrypted passwords easily with some freely available s/w - but my 10 year old would find that harder to use but wouldn't have any problem with FF's implementation!
I've just played with 'Master Password' and it rather defeats the object for me as you still have to enter 'a' password. I don't think FF have thought this through very well - and it looks like plenty of others (when they realise how things work) think the same.