Passwords are fundamentally broken, and only getting more so with every passing month. To be secure they must be:
* Different on different sites.
* Changed now and then.
But people are not actually capable of doing that, as in, they just plain CANNOT do it. Thus "solutions" like storing the passwords in a database, and encrypting this with a single password. This works to some degree, but a single keylogger on that machine still gets access to all sites, thus for some attack-scenarios it's actually worse than simply writing the passwords down on paper.