The only use that I see for a standard-password approach is that it would circumvent some ISPs' terms of service that say you can't run an open network. But even then, a court may find that a closed network with a password like `openwireless` (i.e. as part of OpenWireless.org) is an "open network" anyway.
That's why they say:
> We're working with a coalition of volunteer engineers to build technologies that will let users open their wireless networks without compromising their security or sacrificing bandwidth.
There are a variety of technological solutions possible, many of which could be implemented in firmware (see OpenWRT). I'd guess if we dig deeper on their website, we might get to their tech plans; I am not familiar with them specifically.
Although, honestly, if you're counting on nobody being able to sniff your traffic in transit for security, you don't have enough security anyway. But still, yeah, I wouldn't want to make it that easy.