Most people won't think that, I'd imagine*. They made it very clear that it would not be in the cloud, would not interact with other devices, and would not be available to app developers. It's stored in its own dedicated chip on board the device itself, and never leaves the device.
Yeah. If the NSA wants your prints, they'll just grab some garbage. Your prints are EVERYWHERE. Easily aquired.
Now hypothetically, the difference between the finger scanner on my PC that I never use vs. on my phone is this:
Windows never really integrated the finger scanner. I've NEVER seen a PC with that software enabled and ready to go out of the box. As a result, it was a piece of hardware that never saw use.
Now for smart phones. They need identity management. When Mr. Morrus picks up his iPhone, it should show him Mr. Morrus's email, bank balance etc. When Mrs. Morrus picks it up, it should show her Candy Crush and her email.
The smoothest way to do that is when you click the Home button to activate the screen. If that scan happens FAST, then it is seamless. Once Mr. Morrus clicks the Home button, his favorite picture pops up as the background and he swipes it open. No different than any other time he unlocked an iOS device. His wife sees her background when she does it. Slick.
The security is needed because people can already deduce your swipe pattern by the smudges on the screen. Your smartphone is a security risk if I steal it and get into it before you realize its gone to do a remote wipe (and there's stuff I can do to stop that as well). People say they got nothing sensitive on these devices until they realize what they forgot about when a hacker hits.
That's the story of how it could work, and what value it could have.
I'm a little disappointed in the news coverage, as it seems like there's no single "here's everything that was said" article to cover the highlights. I haven't actually seen an article about the fingerprint scanner post-presentation.
My wife will get a 5s. She's due for an upgrade and has a 4s. She'll get $150 for it in trade-in at Worst Buy (I got $140 on my iPhone 4 just 2 months ago).