Um yea.. "basically".
Except they demand an 'ultra-slow' hash function in that paper. You ignored that requirement and that makes your implementation equivalent[1] to using the same password for all websites.
You are wrong. Your analysis is based on the premise that an attacker might be able to compute "a billion hashes per second".
As I just showed you in my previous comment anyone with $3000 USD can actually compute at least 6000 billion hashes per second.
This means it takes about 11 days to crack a random 8-character alphanumeric password. Not 200 years as you claim.