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So after a breach, you have our (currently) 2 million hashes, and let's say you recover only the weakest few percent of the passwords, which is 60000 known good passwords. Instead of owning 60000 accounts now, you have 60000 passwords, each of which is going to require on average one million attempts before you guess the correct username. Is this not self-evidently better?

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Well, let's look at it realistically: http://arstechnica.com/security/2015/01/yes-123456-is-the-mo...

The #1 password out of 3.3 million was 123456, which was used 20,000 times.

So extrapolating that for your 2 million hashes, we'd expect the top password to appear roughly 12,000 times.

Running those numbers, we'd expect each guess to have a 1/12000 chance of matching. Or more specifically, a 1988000/2000000 of not matching.

With some quick running of those numbers, we'd expect a 50% chance of finding a match after trying just 115 random usernames.

I'm not saying it isn't an interesting approach, I just don't think it's nearly as effective as if you encrypt the hash directly (which has no attack vector unless you can get the key).

You forget the cases where username=password (or username+CelverP3rmutation)=password).

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