If you have ten people logging in per second, you've got to have more than one server. Distribute the login requests.
And if it really kills you to make it take a full second, then make it take 1/10th of a second: there, now your hashing is faster than the time it takes to dynamically generate a page.
People really need to learn that security doesn't come free, and some times you just need to bite down and say "You know what? I never plan on getting broken into, but just in case I do I'll take the tenth of a second extra computation in exchange for doing the right thing."