iCloud Keychain is meant to be an easy way to manage passwords on your Apple devices. When password management is easier, using stronger passwords is easier. Since it can be tough to come up with strong, unique passwords, good password managers will generate them for you, and iCloud Keychain in OS X Mavericks is no exception. Unfortunately, the passwords generated by iCloud Keychain aren't exceptionally strong, but they are better than using the same password for every site. That makes them an okay starting point for people who want a little more security, but don't want 1Password from the Mac App Store.