Intel is full of secretaries who can steal such secrets from file drawers, but don't. Because they respect the fact that they are trusted insiders. Mr. Schwartz broke a glass door. No great technical accomplishment. No surprise that it was breakable.
All security is relative.
If Intel had shadowed the password file, he could have used a sniffer. If Intel had encrypted the traffic, he could have attacked the encrypting host. Full internet since 1992.