Kudos to Mozilla for trying a new way to simplify passwords. Very similar to something we implemented at Shop It To Me in June and that appeared in Hacker News. Here's the link with the conversation: https://news.ycombinator.com/item?id=7818584

And here's the announcement. http://blog.shopittome.com/2014/05/29/bye-bye-passwords/

Overall it has worked very well for us and is no less secure in my opinion than all the reset password options. 2-factor authentication is still better though and should be used for the sites requiring the most security.