I think that this rule should be canceled until we have this system. Due to recent problems with one of my scripts I was going to create interface to allow some trusted users (or any user with more than 1000 edits except some blacklisted) to _stop_ any of my bots without blocking bot's account. Of course, such a tool should check which user is making this request; now the only way to do that is to ask password on Wikipedia.
you can easily verify a users identity by requesting them to make an edit with a predefined edit summary to their user page. Interiot is currently using that for the opt in of the edit counter.
I firmly believe that it's a bad idea to ask users for their password - it's convenient, sure, but it's an invitation to abuse. There should and will be a single, simple and reviewable way to authenticate. Please be patient.
-- Daniel