This doesn't make any sense to me. If attacker can intercept connections I'd rather he get the hash than the plaintext password. At least then actual password is still not compromised, which is good, given how many people share passwords accross services. If he can tamper with connections, there's nothing that can be done anyway.

It would be very nice if there was a feature in web browser that allowed user to opt in to something like this:

When there's a password input on a website: 1] automatically take website's domain concatenate it to plaintext password 2] generate a secure hash from 1] 3] Derive some reasonably portable text password (20-30 characters) from 2] 4] Make it so that original web page never has access to user's plaintext password 5] Submit result of 3]

Downsides:

1] Stupid websites enforcing password rules other than length (can be worked around mostly transparently). 2] Extra stupid websites limiting password length. (requires user interaction and configurable exceptions for such websites) 3] Can't login with browsers that don't implement this.

This would be very nice for people who share passwords between services. Also would make web service data leaks less valuable to attackers. User would not depend on service password handling quality and/or operator's morality.

I use different passwords for each and every service. But many people can't be bothered or don't get the risks of password sharing, so it would be at least some help to them.