Not really. There's no privilege escalation. You can only change user's password if you're already logged-in as user. That's bad, but it's only going to happen if you literally walk away from a terminal and someone else sits down.
How? The problem he mentions at the end of the post only applies to the currently logged-in account. If you can change root's password, then you're already root, and don't need to change root's password to gain access.
"Like I said, it's not good, but it's not what I would call a "security hole" because there is no escalation of privilege."
Doesn't the end of the article suggest that without admin access, you could just reset the password for any admin user, then be able to log in as them? Sounds like priv escalation to me.
Edit: Actually, reading further comments, it seems you can only reset the password of the currently logged in user without reauthentication, so you can only get admin privs if you've already got a console with admin privs. I'm wrong.