Indeed it is just a breakout board. It's really just to make
it more convenient to connect peripherals. I've found for simple things like LEDs, buttons and some I2C components you can get away without additional protection.
I should probably add a little guide explaining what you can do (and more importantly what you shouldn't do). Thanks for bringing this up.
While I'm plugging... It has a big brother in the works over at http://quick2wire.com/ which is pimped out with a regulator, level shifters and protection diodes. This means to address the issues you raise to make it easier to tinker and reduce the chance of damage.