I suspect that Microsoft has the same history: the entire Windows platform was built with single-user PCs in mind, mostly only dealing with trusted input. The users were also expected to be tech-illiterate for the most part and unable to troubleshoot deep technical issues.
More recently I'm still working on video transmission, but on the production side this time. I also originally adopted the mentality that I should crash early if some unexpected situation was encountered, but I ended up walking that back a lot, because having a critical piece of live media production reboot mid FIFA worldcup final is generally Not Great. Degraded functionality is usually preferable. I still crash early in dev builds, but the production code just logs an error and continues if at all possible.
That said, I definitely agree with you for something like password handling. In this case, I do think it's warranted to crash the program without survivors if something is amiss.