The server doesn't store the password. You download the encrypted file containing the addresses and private keys and decrypt it with JavaScript.....
are you referring to the main or secondary password. Because, the service does have the main password if for anything it has it for log in verification. Unless, I am missing the point here. what i think of login into the blockchain service is actually decryption of wallet information on the client side. is it the case? it's easy to verify it; disconnect your computer for the internet prior to typing the password. I will give it a try. will let you know.
The secondary password is optional so i don't understand how the encryption/decryption with the secondary password could be done if an user has not generated the option seconder password.
I haven't looked to be sure, but most reputable places that care about security to not store plaintext passwords, so I would imagine that Blockchain does not have your main password. Typically, they'll store a hash (or salted hash) of your password. Your password can be bruteforced (so a longer password will make it more secure) but the original password is likely not stored as plaintext and thus not retrievable without bruteforcing. I'm not sure how they go about dealing with two-factor authentication though.
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