It's clearly easier to get root passwords out of a database, but in the unlikely scenario where an internal employee sets out to sabotage the whole operation, a couple hundred lines of C code doesn't make the effort that much more unlikely.
Don't get me wrong; storing the passwords in the clear is very bad. The thing that is really going to go wrong? Someone's going to commit a change to their web app that coughs up everyone's password to an outsider.