There is no one solution for all problems.
Use Case 1:
We run three instances in production, each instance serve one version of API and having three different passwords with same variables. We store them on each instance.
Use Case 2:
We run 100+ UI instances with same user id/password
Use Case 3: Time bound
We want to schedule password changes.
Use Password 1 until December 31st,
Use Password 2 from Jan 1st onwards.
Use Case 4: Versioning
When you rollback changes, we want to roll back passwords too.
We need to agree on Use case and design solution accordingly.
Using security as service – Means getting passwords from rest calls with token id too is going to cause single point of failure. We need to make sure that Vault or similar software is having high availability by running in more than one instance.