My guess is that it's related to malware being able to launch these utilities with such a command line switch, in which case the utility will export passwords silently and the user of the computer can't notice anything.
Of course this is quite poor protection:
- Old versions of these utilities still float around the Internet. Redistributing them is legal.
- It is possible for more sophisticated malware to launch the utility and trigger the menu option to export all passwords (maybe when user activity hasn't been detected for a while).
- Ability to read passwords can be implemented in malware itself.
It might be that the webhost Nir Sofer is using contacted him and threatened to close the website if he didn't remove those command-line options.