That's what happens when uneducated disinterested people create computer applications. Maybe it was some of the original code FB originated from, that college garbage.
FB at this point probably so damn huge and corporate that no one knows what is what. Riding the wave until it dies.
Doesn't take a genius to use a better password storing mechanism and not give out all passwords to tens of thousands of people just because.
Plain text... at this point that's an elementary school level error to make.