Even designing your own os, would not prevent the fact that the password must be stored somewhere.
Also note that websites do use encryption as well. Mostly MD5, and if you use a good pass phrase as most tell you, your password should not be reversed. MD5 encrypted strings are found via the use of dictionary attacks. This means that having a very diverse password, will highly reduces the possibility that your password will be found/picked up from a dictionary file.
I don't care how ‘secure’ your systems are. If you have stupid people running them and using them, you can't win.
For those that know