LastPass does this, and more
I guess the question "why would you use this instead of LastPass" can be answered by "Oh, I didn't know about LastPass".
the Google alternative scares me for a few reasons, but privacy issues aside being locked to a single browser seems like a dumb choice (what if I want to log into that site in Safari on my iPad... what hoops do I have to jump to get my password). LastPass also plays well with others... I use my YubiKey token to authenticate on a machine to prove it's me autocompleting passwords... are Google going to tie this to a 2 part authentication using an Android?
The problems that both of them face today are:
- site specific rules: how do you auto-generate a password reliably unless you know that the site wants "at least 6 characters, a mixture of upper and lower case, at least one digit and the only special characters allowed are #!$%"
- Multi-page sign-in processes: My bank uses a 3 page sign in process and LastPass copes but I had to set up three entries (one for each page). It needs to become more elegant!
- Rules based form completion: Two of the financial sites I use most days have implemented forms where they ask you to "Enter the First, Third, Fourth and Last letters of your password"... sadly LastPass don't seem to have the trick of auto-filling forms like that yet (though eWise do manage it for most of their supported institutions)
Passwords in general suck. Sites that make me create a whole new identity to post one comment suck even more... OAuth isn't perfect but (like OpenID before it) is a step in the right direction...