The following situation can happen ( bug 607882 ):

(1) User syncs passwords.
(2) On a Mac machine, the Keychain entry used by Chrome to decrypt stored passwords is reset.
(3) Chrome cannot read all stored passwords and hence password sync is broken.

The user has all the passwords -- those from before step (2) in sync, and those after step (2) locally, but cannot use the former on the Mac and cannot upload the latter sync.

It is possible to fix that manually (stop syncing, delete old passwords from DB manually, start syncing), but that's tedious and tricky even for experts.

Chrome is in a good position to do this for the user. It should just treat inaccessible passwords as not-yet-synced and replace them with the sync copy.