My passwords readable by Firefox extensions??

Yesterday I returned to Firefox for the first time in about 8 years.

While working on my configuration, I came across the following link:

Permission request messages for Firefox extensions | Firefox Help

Which says this about installing certain extensions:

"The extension can read the content of any web page you visit as well as data you enter into those web pages, such as usernames and passwords."

Is this as spooky as it appears to be? What am I missing?

Berton said:

Yes, if a person is not knowing what they are doing that could be very spooky, too much information attainable

Berton:

Not sure if that is sarcasm or not.

I do not know what I am doing---regarding browser security. That's why I rely on so-called security measures developed by "experts", which may be totally useless.

Please enlighten me.

Can you expand on your answer?

If extensions can literally read passwords, why are they so widely used?

Clarify for a mouth-breather.

Samuria said:

You can view passwords in FF anyway

True.

But I'm the one who can do that directly unless my PC is stolen.

Entirely different if the extension can read them.

Tell me why that shouldn't be a concern.

Digital Life said:

People need to pay attention when installing Firefox app's, Before the app is installed it will tell you what permissions the app requires and if it asks for something that you don't agree with you can cancel the install before it proceeds any further.

Digital:

That warning is exactly what prompted this thread.

I was going to install Video DownloadHelper extension and came to this warning.

I remain unclear about the implications of this warning.

Not sure how dangerous this extension is. I think it's quite popular and frequently updated, but.............