The U.S. Government is currently seeking ways to get user passwords from websites, according to sources. (Sources: Dev.Arka, Ron Bennets under CC licenses)
It is well understood that the United States government is committing an extensive intelligence overreach, especially in regards to the Internet. The recent leak of Operation PRISM, the NSA data-mining operation of various social media networks including Facebook and Twitter exemplifies the ridiculousness of this overreach. What is worse though is, rather than settling with what they have, they keep pushing the boundaries of what they can take from American citizens. The worst part of it all, of course, is that nobody is certain that this information is being used for its intended purpose: To fight terrorism. Given the amount of data that has been sought out, most likely not.
Now, we are seeing that overreach extending to a region that nobody, not even in government, can possibly defend. Sources from within Silicon Valley have told the Scientific American that the American government is now demanding that web services hand over user passwords. While Operation PRISM simply demanded so-called "meta-information," which is simply a mechanism to determining the places and things people go and do on the Internet, this request means that the government can indeed look into the entire breadth of a user's activities, as well as find out their personal information. They can even hijack the user and imitate them for the purpose of undermining the user, subversion, or targeting other users. These password requests are truly uncalled for, a step too far, and the legality and constitutionality of the process is one that has to be questioned.
Luckily, at the moment, Internet services have been heavily resistant to government requests, and have also resisted requests to hand over password encryption methods. None of the major services confirmed or denied the requests, but Microsoft, Yahoo, and Google have all specified that they have never handed over a user password under any circumstance. There are some that see this as an extension of the USA PATRIOT Act, which was used after its passing post-9/11 for a variety of surveillance unrelated to terrorism. But even that law did not have provisions that would allow for such requests to occur. This can only be described as hubristic ambition.