1) They are sending it in plaintext
2) Encrypted passwords are a factor less secure than hashed (and salted) passwords
I am not sure how salting the password comes into it in the context you describe - can you explain?
A website storing a password in plain text means that your password is there, waiting for someone to come and take it. It doesn’t even matter if you’ve created the strongest possible password. It’s just there.
...We’re tired of websites abusing our trust and storing our passwords in plain text, exposing us to danger. Here we put these websites to shame.
That is possibly a libellous allegation. It is not necessarily true.
The password is not necessarily stored in plaintext, it may still be encrypted.
The website owner does not understand encryption.
Understand my point now?
Additionally, encrypted passwords are only better than plaintext passwords if an adversary that breaks into your database does/can not also get the encryption key. That's unlikely to be the case.
As for getting the key, I'm no Linux expert but in windows afaik SQL injection generally doesn't allow you to get to the machine key which is used for this type of encryption.
So it really depends on the attack vector on the likeliness of them having the key.
I also totally agree in this day and age everyone should be hashing, it's just too easy to leave an accidental hole and you should mitigate the consequences of a breach.
But I still stand by the idea that they're not necessarily storing the password in plaintext, which was all I was trying to say with my nitpick!
Also, un-salted encrypted passwords are still bad. Just compare the top 10 most popular encryptions with a table of the top 10 most popular passwords.
I'll drop this, but please do hash your passwords with something sensible like bcrypt. ;-)
@omervk
If you store passwords plaintext in the database, a simple SQL injection can dump them out.
If you store passwords encrypted in the database, you need to get the code of the server software in order to extract the keys.
So at the end of the day, it depends on the probability of a complete server compromise vs. the probability of a successful SQL injection.