Alex - while on the surface what you are saying makes sense, as one who has looked at a lot of keylogger data, I can tell you that identifying passwords is fairly trivial, even when the passwords are simple english words like "house" or "dog" (let alone "scrambled words" like "zydkgel" that basically _scream _password. Two things make it straightforward.

   * The word is out of context.  
   * There is usually a time delay on each side of the word.

Also, you usually have them typing in their username/account number near the password, another dead giveaway

So, even requiring that the user make it a straight forward english word provides little (no) defense against keyloggers. On the flip side, when the vendor's hash files (we are presuming at the _very_ least the passwords aren't stored in plaintext, or, the marginally better, "encrypted file") are compromised, having a broad keyspace makes cracking the passwords by brute force more difficult.

If you read the Amex email, they actually require _only letters_ - And, it's not even clear they require capitalization.

I'd love to see how quickly that hash file would fall apart. :-)