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They didn't even like the idea that it authenticated user/pass.

Besides the point, if there was a public LS where you had unlimited accounts that anyone could get, it would be time for a login server list. I think if the LS is released to the public it should be a responsible release. Eg. there is some way for everyone to know about all login servers (that people host and want public), and some generic method for handling user accounts (this is more tricky and may not be possible). But a public server list would be key.