I'm aware that I'm possibly fanning the flames by making another post on the subject, but I want to spell things out clearly. The thing is, the Frienditto site has no legitimate purpose. Let me say that again: it is facilitating nothing that any decent, honest person would want to do.
To break it down: how does this self-described "archive" site work? You provide the URL of a LiveJournal post, and the site copies all the HTML of the post and comments and displays it on the Frienditto site. Now, why would anyone want to do this? If you see a cool post that you like, you might want to draw attention to it. The sensible way to do that would be to post a link in your own journal, or post it to del.icio.us.
If it's a really cool post, you might want to archive it for posterity. Now, why on earth would any sensible person choose to archive a post from LJ, with its established infrastructure and serious, large-scale commercial presence, to some random fly-by-night website? You may doubt the security and durability of LJ, but it's pretty obvious that Frienditto is going to do worse on any of these parameters. It makes no sense for archives to be vastly less secure than the originals. The sensible thing to do would be to copy the post to your computer, if you were really concerned about archiving it.
More likely than LJ disappearing is the possibility that the post's author might decide to delete their post. Why would someone delete their post? The most likely reason is that they regret publishing it for some reason, perhaps because it's generated a really negative response, attracted trolls, caused drama, whatever. In this situation, the only purpose that is served by having a publicly available "archive" copy is to make it possible to continue trolling or harassing or creating drama related to the original post.
So Frienditto makes it possible to use someone's words against them after they've chosen to delete them. But there's a more serious problem. Frienditto also "lets" you archive Friends Only posts. The way it does this is by asking for your username and password so that the site can see posts that you have access to. This makes it possible for the site to archive, or in other words, make a publicly viewable copy of a post that was meant to be private.
Now, clearly there are ways to do this without needing to use Frienditto. If I am an untrustworthy person with access to your Friends Only entries, I can if I wish copy the entry and republish it somewhere online. It's a little trickier to do so anonymously than Frienditto makes it, but it's possible. But just look at that hypothetical scenario again: the whole point is that only if I were an untrustworthy person would I want to do such a thing.
Then there's the whole issue of giving your password to random strangers. It's possible that Frienditto could use your password to post unwanted material in your name, or to read other Friends Only entries apart from the one you decided (for some reason) to "archive", or to lock you out of your account and delete your entries and generally cause problems. I have no reason to believe Frienditto plan to do any of these things with the passwords they harvest; there are plenty of silly LJ toys that ask for a password to get access to protected information, and their creators are harmless fools who reason that, well, I'm a decent person and I wouldn't do that, so obviously everybody should trust me when I say I wouldn't.
But the point is that even if Frienditto are completely scrupulous with the passwords, they are using them for an intrinsically bad purpose in the first place. On the other hand, even if you believe (because all I can do is present my own opinion) that making other people's Friends Only entries public is a legitimate thing to do, as a general principle you should never reveal your passwords. Surely this is obvious?
I have the impression that the people involved in Frienditto are in fact not at all trustworthy. I'm not sufficiently certain of this to defame them though. It is possible that some of the moronic trolls claiming to be involved are actually not, but they just like having their names associated with anything that people are stressed about. It is possible that although they may have done cruel things and abused personal and private information and attempted to cause LiveJournal trouble in the past, they are not planning to do so in this case. This is not the point; I repeat, the site has no legitimate purpose, so even if they only do exactly what they have claimed they are going to do, that is still a bad thing to be doing, and the fact that they are attempting to do it on its own makes them untrustworthy.
Conclusion: Frienditto is a very bad thing. But at the same time, let's not blow things out of proportion. I really doubt that the site is going to do any serious damage to LiveJournal; LiveJournal has survived much more serious attacks before and will do so again long after Frienditto is forgotten. The world is not going to come to an end either, because a few foolish or naive or petty people have provided their passwords to a dodgy site.
My prediction is that the site will fall over in a few days because it doesn't have the infrastructure to support the volume of use it will be getting with all the fuss. (The site is in fact down at the time of writing.) Or if they manage to get it back up again, it will piss someone off enough to find itself attacked either digitally or legally. I doubt the trolls care enough to put serious money or effort into keeping the site going.
Final note: people (claiming to be) connected to Frienditto have been trolling journals with posts critical of the site. As a result of this, I have screened non-friends comments to this post, because I can't be bothered to deal with a potential troll-fest. Legitimate comments may be unscreened at my discretion.
Addendum 6.3.05: hypatia has a really wonderful critique of my arguments in the comments. I suggest everyone should read her views because wow, I've learnt such a lot. (She doesn't disagree with me about this particular site, but does have some very interesting counters to the more general principles I was arguing from!)
Note 7.3.05: Various people seem to have been finding this through links and Google, which is great. I'm almost sorry I ended up screening comments because instead of attracting trolls I've attracted loads of people with interesting contributions and information! I hope to reply to everyone who's contributed individually, but just as a general statement, thank you all for your thoughtful remarks.
If anyone wants to link to this post they are absolutely welcome. My position against Frienditto has no bearing on my attitude towards legitimate links. And if people are finding this piece helpful, I'm happy to disseminate it.
I have left a couple of comments screened, not because they're deliberately trolling but because they're drawing attention to artificially created drama and unsubstantiated rumours. Part of the point of this post is that you don't have to believe that Frienditto is the spawn of the devil and eats babies to see why it's a bad thing. So I don't want the comments of this to degenerate into wild rumour-mongering; all that does is give Frienditto supporters a case because they can say, look, people are spreading false information about us! We are poor innocent victims!
Also word up to largesock who spotted a really horribly embarrassing typo in my original post. I've left his comment screened at his request, but I still think he should get some appreciation for eagle-eyed proofreading skills. I'm very much the sort of person who prefers for people to let me know if my knickers are showing.