What's interesting is that the PCI standard seems to be unclear in this respect. He quotes from the standard:
8.4 Render all passwords unreadable during transmission
and storage on all system components using strong
cryptography.
This seems to leave room for passwords to be encrypted instead of hashed. I'd even say it suggests they should be encrypted instead of hashed, by not distinguishing between 'during transmission' and 'during storage'.At the very least, quoting this isn't going to convince someone that passwords should not be decryptable.