There is nothing new on the issue of unsecured sensitive data traveling across the network in plain-text. In fact, many popular websites use SSL to crypt information because they became aware of the man in the middle attack, so owners secured their webpages to avoid the attack.

Unfortunately, there are many companies that thinks nothing will happen if they use plain-text to send logon information. You can say there is no problem with hashed passwords, but they are not enough. Rainbow tables are widely used so if a hash is grabbed from the network, it will be cracked in no time.

Delivering SSL and authenticating both ends might be a cheap and reliable solution for this. Yes, I know SSL is vulnerable to Man-in-the-middlle attacks, but it you authenticate certificates on both ends and pay attention when something like this appears, the risks is adecuately minimized:

How many of us have clicked directly into continue to this website without paying attention on what is the error in the certificate?

I have seen universities where students capture professor's usernames and passwords and start to sell grade changes. I have seen many hijacked e-mail accounts on ISPs that doesn't crypt logon information.

These controls are easy to deploy: IIS has SSL client certificate authentication and  Apache also implements it. If you use all the available security functionality you have in your IT infrastructure, you will minimize many information security risks like this one.

-- Manuel Humberto Santander Peláez | http://twitter.com/manuelsantander | http://manuel.santander.name | msantand at isc dot sans dot org