The traditional pitch from security experts is "Using a password manager is better than reusing the same password on lots of sites, or using low entropy passwords, or saving your passwords in an excel spreadsheet, which is what you were probably doing before"

Apart from shoulder-surfing wouldn't an encrypted spreadsheet be equivalent (not Excel, as I imagine MS might randomly send that data home, eg of there's a crash)?

In both cases once there's physical compromise, if they have the "master" password you're screwed?

I presume they use clipboards for the pasting, or do typing that could be captured bya keylogger.

It doesn't. It helps with usability, it seems, because if you have multiple devices it's easier to manage them.