What we need to be doing is spending our time either on a massive education campaign or on technological solutions (like challenge response passwords, which HTTP never added even while every other old protocol was carefully adapting to get this right), not entrenching the position that users should be allowed to do the thing that will never ever ever be secure by putting up laws that somehow make it look sane.
The point here isn't "shame on the users": the point here is "shame on developers and lawmakers for working against users by encouraging them to do this horribly insecure thing rather than doing something sane". Seriously: how about we instead make a law (with a GDRP-like lead up of multiple years to "get ready for it") which says that "handling passwords at all isn't legal, even in transit (whether on a third-party SSL termination service or on your own servers)", and lets see how many mere hours it suddenly takes the Chrome/Firefox teams to come up with a real solution to this problem?
Passwords will never die. also by outlawing them either you force everyone to re-register to every site they want to visit or give all the power to single-sign-on services like facebook and google.
The fact that users do insecure things—and that real-world systems need to be designed to deal with that fact—is orthogonal to the idea that we should be making things more secure as well. Yes – security is broken and we need to fix it. The way to do that is emphatically not to pretend that it's already fixed.
I mean, seriously: why would the law make it so illegal to allow passwords to be dumped, with technical people coming out saying "these passwords might protect something really important as the user is using the same password on more than one thing", if that wasn't at all how you were supposed to use passwords?
Imagine if the opposite were the case: if banks were not liable for any money lost by a user if it could be shown that the user was using their banking password for any other service. That would be a very different conceptualization of the risks and how passwords work, and frankly "fits reality" better than what people seem to want out of this situation (which is the exact opposite of that) :(.
If you don't want to claim that the issue is "already fixed" by "a bunch of websites that know what they are doing hash passwords and hopefully never have code bugs or people tapping their web servers or employees who can modify the code or debug logs that dump POST requests accessible to anyone or any other number of ways this password could be leaked because you sent it to this company's web server (which quite often might have used some SSL termination from some third party and so who knows how many people have access to your password!)", we might come up with actual solutions (or maybe spend the effort to educate users, as right now I don't know anyone who really tries).
I believe in some places this is the case.
If you get hacked or use 123456 as password it is not the bank fault. If a service get hacked and the attacker discover your bank password it is not the service fault if they did their due diligence in securing your data.
most people use the built in password manager anyway
I have so little sympathy for this position that despite generally having been pro-GDPR I no longer can support it if it is going to be used to encourage users to do something fundamentally stupid :/. The reality is that if we are going to make users think using one password is somehow ok then we need to be using authentication protocols that don't involve sending that password to a server in the first place: this is 2018, and challenge response takes like an hour to implement; the idea that sending a critical password to someone in the hope that they immediately hash it and store it is something that is somehow protected is insane.