Obviously, if they have the hardware, they can do pretty much whatever they'd like, so it wasn't that they would be able to use it to look at her personal files or whatever (we had already removed anything personal before bringing it in).
It was that they, acting as a trusted authority, were telling people that it's okay to give away your password. It also means that anyone who uses the same password for their machine as they do for their email or their other accounts is handing their life over. Of course people shouldn't be doing this, but of course very many do, and it's just completely irresponsible of Apple to explicitly put people in a position where this could easily be exploited by some faceless tech behind the counter.
As much as I love their products, I really hate how Apple operates sometimes.