One of the key principles of cyber security is Confidentiality.
I would imagine that the passwords would be hashed and stored in a database but the admin must know the plaintext value before it is hashed. Your password should only be known to you, if the admin decides tomorrow that he is sick of his life and wants to inflict damage on someone and knows your password. Let's say they made unwanted advances towards you and you brushed them off, they have the power to inflict damage in your name and blame it on you.
If I was a hacker, this would increase the possibility of gaining entry, if there are two attack vectors rather than just one.