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I'm using Kubernetes and many of the apps that I use require environment variables to pass secrets. Another option is the pod definition, which is viewable by anybody with read privileges to K8s. Secrets are great to secure it on the K8s side, but the application either needs to read the secret from a file or you build your own helm chart with a shell front end to create app config files on the fly. I'm sure there are other options, but there's no "one size fits all" type solution.
The real issue here is that the app is happy to expose it's environment variables with no consideration given to the fact that it may contain data that can be misused by bad actors. It's security 101 to not expose any more than the user needs to see which is why stack dumps are disabled on production implementations.
The problem is in fact in the applications. If these support loading secrets from a file, then the problem does not exist. Even with the weak secrets implementation in kubernetes, it is still far better than ENV variables.
The disappointing thing is that in many "selfhost" apps, often the credentials to specify are either db credentials or some sort of initial password, which could totally be read from file or be generated randomly at first run.
I agree that the issue is information disclosure, but the problem is that ENV variables are stored in memory, are accessible to many other processes on the same system, etc. They are just not a good way to store sensitive information.