Let me explain why. Design where passwords are stored in their normal form (it's called plain) isn't very secure (not only for operating systems) because if list of such passwords falls into hands of malicious person, he can log in instantly, since list of user names is usually easy to retrieve (in Linux from /etc/passwd file). That's why hash functions are used instead. These are one-way functions - you can create hash based on value but you can't create value based on hash. If malicious person gets a list of hash values he can't retrieve actual passwords from them (or at least it's more difficult) and user still can login - when he passes his password, it's translated to hash and compared with stored value.
