Google Docs documents can be published on public sites. How does Google know the password to use (to get the document) when all you specify in the HTML is a string like: src="https://docs.google.com/document/pub?id=..." and no explicit password is used?
The document is set as public, so anyone who has the link can view the file.
Google Docs doesn't need to know your password in order to transmit the document to the person requesting it.
If you'd like to protect the document so that only certain people have access, view the document, then click File -> Share.
When docs are set as public. When accessed by non-google account users they will open without requesting a password. For those who do have a google account, if they are not currently logged in then google will prompt them to log in.
THIS IS A PROBLEM. It freaks people out, making them think they need a password to access the document. In some cases a non-google user and a google user may be sharing the same computer or device. The google user logs out. The non-goolge user the can't access the publicly shared document.