I recall chrome used to let you reveal passwords with a simple button press in the UI. I think their conclusion at the time was if an attacker had local access there was no point in pretending they were hidden.
Not to strain the analogy, but it's more like not locking your bike when it's in your locked apartment (the apartment being your computer). The thought being that if someone puts the time and effort into breaking into your apartment, a bike lock isn't going to do anything to stop them.
Operating systems have had guest accounts for decades for the "handing your PC to friends/family/etc." use case. Even Android phones have temporary guest accounts (though many manufacturers disable that because it interferes with their own secondary user-based hacks).