When ProjectLocker was accused of storing passwords in plaintext, they responded by saying: "You can't verify this for ProjectLocker or any other website without access to their backend systems." http://superuser.com/questions/46810/should-i-be-concerned-i... Is that incorrect? If not, then I wonder how the author of this article can be so sure of his findings.
Storing passwords in plaintext (or obfuscated) in a database is not what the author is saying. He's simply saying that they're not using encrypted HTTPS connections, so if a user logs into one of the offending sites over a publicly accessible connection (i.e. public wifi), anyone nearby could use a sniffer app to see their password travel over the network. Regarding the Super User post, he's correct that storing pass…
Reversible can be secure, but only if it is done right.
I once had to set up an affiliate section for a website, and we needed to securely store sensitive information such as tax IDs. My solution was to salt it then encrypt it with a public key. (The salt was not stored. Its only purpose was to make it impossible to do a brute force search through possible answers.) The private key was only available on a machine on a different network. (Because it only needed to be run every few months, I went further still and stored the key on a disk that was on no network at all!) From there it was easy to suck in the information, decrypt it with the private key, and put it into the financial system.
Yes, I was storing sensitive information in reversible form. However even if you managed to compromise the webserver, the database, and had the source code, decoding that data was still effectively impossible.
If you follow this strategy, the one thing that you cannot do easily is have the ability to have your website extract the sensitive information. (If you really want to you can have a table of requests, and a batch job elsewhere that attempts to fulfill them. Be very, very careful in setting something like that up though, because your attempt to open things up a crack may result in a hole a Mack truck could drive through.) However for certain use cases, it works quite well.