Why are Docker Secrets considered safe?

A secret stored in the docker-compose.yml is visible inside that file, which should also be checked into version control where others can see the values in that file, and it will be visible in commands like a docker inspect on your containers. From there, it's also visible inside your container.

A docker secret conversely will encrypt the secret on disk on the managers, only store it in memory on the workers that need the secret (the file visible in the containers is a tmpfs that is stored in ram), and is not visible in the docker inspect output.

The key part here is that you are keeping your secret outside of your version control system. With tools like Docker EE's RBAC, you are also keeping secrets out of view from anyone that doesn't need access by removing their ability to docker exec into a production container or using a docker secret for a production environment. That can be done while still giving developers the ability to view logs and inspect containers which may be necessary for production support.

Also note that you can configure a secret inside the docker container to only be readable by a specific user, e.g. root. And you can then drop permissions to run the application as an unprivileged user (tools like gosu are useful for this). Therefore, it's feasible to prevent the secret from being read by an attacker that breaches an application inside a container, which would be less trivial with an environment variable.

Docker Secrets are for Swarm not for one node with some containers or a Docker-Compose for one machine (while it can be used, it is not mainly for this purpose). If you have more than one node then Docker Secrets is more secure than deploying your secrets on more than one worker machine, only to the machines that need the secret based on which container will be running there.

See this blog: Introducing Docker Secrets Management