If I sneak the passwords out, can't I also sneak customer personal data like bank balances, SSNs, and so forth? Most banks maintain more than enough information on a customer to perform an identity theft and then some major fun begins such as misappropriating the title to real estate.

I don't disagree it can be done, just pointing out that if we assume a compromised employee and a vector for removing the passwords, encrypting/hashing the passwords is like locking the side door of the stable.

Yes fair point.

But hashing the other data isnt practical - so it's the security vs. access tradeoff. You can hash passwords without much inconvenience.

Also with individual pieces of those other examples of data you mention it is not possible to gain access to the rest. Whereas with a password it IS. Damage limitation.

Finally the password and username (or email) are "front of the line". They HAVE to be accessible to an unauthorised client simply so said client can be authorised. Whereas the other data should require authorisation to access.