That sounds very familiar!
There was essentially no security on those Econet networks. If you had a copy of the executable that could read and write the memory of a remote computer, you were good to go.
I remember I had a print-out of a hex dump of the REMOTE command and used it with exactly that key capture attack. I just typed in the executable then told the teacher I'd forgotten my password and needed it reset. I watched remotely as he logged on to his admin account.
The next day, all the BBC micros in the lab played Captain Pugwash when they started: very beep-heavy given the ability of a BBC to create sound.
Eventually I was caught re-entering the hex dump and my printout was confiscated. I didn't have another copy.