- The app checks your email on your behalf.
- You need the actual password to log into an IMAP server (android also stores your email passwords in clear text if you aren't using gmail http://code.google.com/p/android/issues/detail?id=10809).
- They clearly state this in their response, which the article completely ignores. They try to use OAuth where possible.
- They store the passwords encrypted via S3. Personally, I'd prefer that to MySQL on a VPS somewhere.
- See also: https://developer.pidgin.im/wiki/PlainTextPasswords