What do you recommend users do instead? Unfortunately there will probably always be websites storing passwords in unsecure ways. I mean I'd certainly rather not have to deal with the hassle (however small) of using LastPass, but as you said, that's the world we live in. Hoping for competence by the writers/maintainers of websites is also flawed computer security, is it not?
Hoping for competence is indeed flawed from both sides.
I would hope users use distinct, random passwords for each site they visit and that developers store those passwords in a safe secure way. I also assume both sides won't listen to logic however :)
The reason I'm annoyed with this particularly is that larger sites are more likely targets due simply to their size. Larger sites generally have the developer resources to provide a good solution to the problem from their end but commonly don't.
This makes them look bad and means their users are left in more danger than before. No-one wins.