Pretty sure they're not getting rid of passwords.
Doesn't do anything to passcodes, meaning someone sees your passcode and steals your device it's the same problem as before.
We don't know how to really solve this issue without creating other issues, simply put. Like if you can't take your phone off your account without a USB security on your account, what happens if you move across the country and forgot your key for some reason, or lost it on the way? You have your devices but you can't do anything with your account now. Some people can live with this limitation, and some people can't, so it's hard to decide which way to go, and if we let people have the option then people might not understand the limitations of the system they went with.
Of course something should be done about the issue, just saying it's more complicated than just "Apple should do this once and for all!"
The way it's more secure is it's impossible to get phished, the tech simply doesn't allow it. A site could fake out Apple's site and your device will not allow any information to get into the fake site that could be used to log in to your account.
And that's passkeys, not passcodes, by the way. Passcodes are the PIN you enter to get into Apple devices. It doesn't affect passcodes to support passkeys, the issue is still there that people could "shoulder surf" and get into your device if they clearly see your passcode. Passcode security will take some careful consideration to fix, as I say above it's complicated, someone can still be negatively affected no matter what you do.
Passkeys are for online security, and not device security. They are basically equivalent to 2-factor in terms of security level, but only need to be supplied once.
