If you refused, would you get overruled internally?
Current state (now we have been bought and are effectively more than an order of magnitude bigger): I definitely don't have opportunity to make a unilateral decision like that. Even though the larger company has a more “fair enough, feel free to go elsewhere” attitude when a small client says “if you can support × that is a dealbreaker for us” then we could previously afford to take as our stance, some of the bigger clients are definitely paying us enough, and do use passwords, that someone above me would overrule a keys-only decision.