I sure don't see any security advantage.
There are very many sites, such as PayPal, eBay and many banks, in which IE
and/or the web site will store usernames or the equivalent so that it does
not need to be re-entered each time the account is accessed through IE.
In the case of email, passwords can easily be obtained by anyone (I assume
you know how) with sufficient knowledge (I won't explain the details here
for obvious reasons) and physical access to the system for a few minutes at
most. This can be done if an email program such as Windows Mail stores
username and password. This is not a Microsoft problem; it is due to the
design of email. Decreasing convenience for the purpose of increasing
security can certainly "lull the user into a false sense of security" since
email is fundamentally insecure.
Right. But as I explained earlier, Microsoft rethought all security aspects
for Vista, and the OE way was thought to lull the user into a false sense
of security, hence it was done away with.