How many times does something like this have to happen before people learn to encrypt? Any serious business or financial data should be encrypted, period. Almost all of the major hacks we read about could have been minimized if not entirely avoided if the data was encrypted.

I just read the release from Bitcoinica where they explained that the server accessed contained _only_ Bitcoinica's "hot wallet", and that no code, services, customer data, or other wallets were stored on the server.

If this was the case, why couldn't every access to that wallet, which, assuming the above is true, necessarily occurs on other servers, run a decryption on the file first? Even if you keep the passphrase and/or secret key in plaintext on the machines that run the code, the separation should prevent this kind of rogue access as long as the intrusion is isolated as these people claim.

There is really no excuse just to have a plaintext wallet sitting around anywhere anymore (the official bitcoin client now supports symmetrical encryption). Like credit card numbers, when a wallet is accessed it should be decrypted in ethereal storage like RAM and promptly discarded; it should never hit disk as plaintext. At least the same practices used for PCI compliance and credit card data should be used for btc wallets; preferably better since there is no recourse if your btc wallet is compromised.