Calling SetPassword() on the AccountsService results in a crypted password included on the command line. This seems to me to be minor security hole. It is the equivalent of having /etc/shadow readable by non-root users (albeit only for those who change their password via the AccountsService).

Any other local user can (in a default linux configuration) see the command lines of any other process on the system.

The relevant code is in src/user.c in the user_change_password_authorized_cb() function:

        argv[0] = "/usr/sbin/usermod";
        argv[1] = "-p";
        argv[2] = strings[0];
        argv[3] = "--";
        argv[4] = user->user_name;
        argv[5] = NULL;

strings[0] has been set to the crypted password in user_set_password(). The crypted password has been passed from the client (ie: gnome-control-center).