Yes, but if you someone already has shell access to *that* account, then there is already a bigger problem. If I create a script like the above, and make it chmod 755, nobody is going to get the sensitive data unless they are logged in as me, althought anyone can read (and run) the script themselves. You can even use very restricted accounts (e.g. no shell access) for more security. The point is, you completely separate the sensitive data from the script. I like this particular way because I can do something like this in .bashrc:

alias oradev='export ORACLE_SID=dev; export ORACLE_PASS=foo; \
  export ORACLE_PASS=bar; echo Set instance to development'
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...which allows easy interchange of instances, passwords, and other parameters from the command line. Nothing wrong with setting good permissions on an included file, either, but if you can run/read the script, you can track down and read the passwords.