Not quite. Root access means a compromised single host. Access to a list of WiFi passwords means compromising all the WiFi networks the machine in question has been given access to, so you'd still want that encrypted.
Sure, but if you're root, then you can quite easily decrypt to find those passwords. This isn't to say that it shouldn't be encrypted (another hurdle, etc), but once you're root, then anything on that machine is fair game, including those WiFi passwords if you're determined enough.