Earlier quoted context omitted.
I'm not talking about 10 passwords I have as a backup. I'm talking about 10 application specific password that are used every day by my phone, mail client, xmpp client etc. They just need to intercept any single of these password to compromise my mail account. How's this different from the situation before two-factor authentication?
All I can figure is it makes it easier to revoke one password without changing all the others.
I've got an asp (dsp?) for my phone (which all the applications that need one on my phone use), another for my iPad, another for each of my laptops, home computers, and my work computer. If I lose (or have stolen) my phone, I can revoke the password it knows - without needing to change any of my other devices.
Using the word "Application" allows everybody (including, I think, google's own security people) to make the incorrect assumption that the "iPhone mail password" is "specific" to mail - and only allows POP and IMAP to work. Instead, what "application" means is not the easily assumed "a piece of software" interpretation, but the "use to which something is put" interpretation. The decision and management of that "use to which a password is put" is not made nor emforced by Google, but is all up to _me_ (or, as it turned out, to any attacker who could lever one out of me).