Change "post is password protected" text

Is this text only in place of the blocked comments?

Yes – it has to do with the way the the plugin blocks the comments section.

There’s an explanation and a way to remove this described here:
http://rocketgeek.com/plugins/wp-members/users-guide/filter-hooks/wpmem_post_password/

This whole thing is going to change as there is an improvement in this area of the plugin that will be in an upcoming release (which release is TBD, but it will between 2.9.6 and 3.0).

(BTW – your original question – how to change the text – that’s actually in your theme, most likely your comments.php)