While that is true, that's blaming the user for choosing bad passwords, and not the system for keeping the systems safe, which is an implicit guarantee - I'm giving you this secret key, your job is to keep it safe.

The only reason we need unique passwords is because the system can't hold up its end of the bargain.

Edit: And in hindsight, I was wrong in calling it a bad password from the user - the only reason it's necessarily bad is because it has been compromised. If I use the same sufficiently complex brute-force proof password everywhere, we can safely say I've held up my bargain, but a single data breach completely removes that otherwise impenetrable defense.

If it's stored in a reversable fashion, it means somebody can pretend to be me, therefore auditing is meaningless.