Yes, however, chmodding folders to 777 and placing sqlite databases in unprotected folders accessable for the entire interwebs does tend to give me little hope that these guys can actually produce secure PHP code. sadly, as the software is pretty awesome featurewise.
If the parent's folder limit access to a certain user or group there aren't security problems and may be exactly what you need.
for example, if you work with other people and you have a command to generate thumbnails from the shell, you may have a layout like this one
chmod user group path
2770 www-data devs /srv/www
2777 foo devs /srv/www/site/thumbnails/
/srv/www/site/thumbnails may be accessed only by people in the 'devs' or 'www-data' group ('foo' can read it only if he's in the group 'devs'). The obvious alternative would be to set that directory as owned by 'www-data', but you need root access to do that (unless you put everybody in group 'www-data', but then everyone can access every site). This way every user in the group 'devs' can make directories usable by both his teammates and the webserver, without having root power or being in group www-data. Have more than one team? Use different groups for each team.
0777 (or more like 02777) is a perfectly valid permission for world-writeable directories. Except that the case "anyone may do anything here, this is a free and unrestricted file sharing area" is quite rare. And almost certainly not for anything under /var/www served by httpd with PHP support.
That's not true. There are many thinks inherently wrong with PHP security. And while you can write crap and insecure applications in any language, PHP actively encourages it.
Browse through the OwnCloud release notes. Almost every version has fixes for XSS and remote code execution. Fixes are great but the developers seem to be making the same mistakes over and over again. It is just too easy to do that in PHP.
