Yes, it is a dumb thing if true (didn't test it myself), and something they should fix ASAP. However, to keep this in prospective, it should not be an issue for most people. As long as you are not on a public network, or using your neighbors wi-fi, it would be very dificult for someone to see your traffic -- and they would have to be specifically targetting you. So, for example, even at a Starbucks wi-fi spot, I doubt the network admins are targetting you to get your account info.
It is still very bad though, and yes they really really need to fix this ASAP.