That's the weakness of services that are supposedly "Host-proof". If the host is sending you the webapp/javascript/webpage in which your data is decrypted, each and every time you visit their website, you have to trust that they wont (or someone else wont) modify it in a malicious way in order to gain access to your data.
The only way to be safe from this kind of attack is to use the same trusted copy of the code, and not use any new versions until you trust that it is also safe, or to somehow verify that the webpage sent to your browser is exactly what you expect it to be.
Cortesi has a very good write up on this issue: http://corte.si/posts/security/hostproof.html
An alternate option to reduce some of this: http://www.rakkhis.com/2011/06/i-was-hacked-mtgox-bitcoin-3-...
My question: is there an intrinsic weakness in storing these passwords at a central location? E.g. would it be feasible that LastPass gets targeted by a complicated blackhat attack, and then instead of losing just one of my passwords I lost them all? Or is the manner in which they are encrypted and transmitted secure enough to prevent this?
Thanks.