"Is it harsh? Would it be harsh to judge an authentication scheme that stores all passwords in plaintext? Server logs don't typically contain data that should be considered secret."

You're right, but server logs are also not considered to be publicly available, and someone made that mistake in the IEEE example. Server logs can also be configured to store form post data, there's a "simple misconfiguration" that in concert with ther IEEE's error would defeat just about any common auth scheme (it'd even put TOTP 3 factor auth logins at risk for the minute the magic nuber is valid).

You're right - it _should_ be challeneged. But it seems petty clear that the risks associated with auth disclosure here are effectively zero and all borne by Marco not the paying subscriber who's credential is mis-used, and there's no possibility to leverage an exploit of an account here to gain further access elsewhere, even if Marco _did_ fuck up so badly to allow easy discovery of login credentials, this scheme is still entirely suitable for this application. But I don't want my bank to use it.