If an attacker already has access to the password hashes, then yes, they can brute force any 8 character case-insensitive password easily.
However, a brute force "try to login to their site" attack isn't feasible without hitting a rate limit or alarm: (26+10)^8 = 2.8*10^12 is still a lot of attempts to login to an account.
The weakness to this model is the password. It is easiest to guess your password if it was the same one on your Sony account (i.e. leaked). However, if you're forced to pick a unique password just for Schwab, it's immune from the most common [citation needed] attack on passwords. Also, it makes the Schwab password useless for hacking other databases, making user passwords a less valuable target for hackers.
If the tradeoffs are worth it: I have no idea, but it's not without merits. I personally like using a password manager with 2-factor authentication and generating all new random PWs for my accounts. I generally don't use more than 8-character passwords, since they're isolated from each other anyways. I would be negligibly less secure using this with Schwabs constraints than other sites, as the security lies in isolating passwords. (I use https://lastpass.com/)