Looking at the code, it opens a stream to read the file. Before it passes that stream to the method that reads the content, it checks for errors on the stream. My guess is that the user trying to mount doesn't have permission to read the file.
The right way to fix this is to give that config file the proper ownership and permissions if you can determine what it should be. If you cannot, you can open up the permissions to make it readable by everyone as a test.
Try running "chmod 666 /etc/passwd-s3fs" to make it world readable and see if that allows you to mount. Note that some programs (such as Openssh) are written to warn or fail if config files have permissions that are not restrictive enough. I only looked quickly, but didn't see that in S3fs. Once you confirm the config file is correct, you must then set ownership and permissions to something more reasonable from a security perspective. (anyone reading your credentials from that file can then use your AWS S3 account)