Beyond the headlines of, ‘Staggering’ data breach of 1.2B usernames and passwords could worsen

Many of you have heard the following 

"The massive data breach revealed this week could be even worse than initially feared, warns a cybersecurity expert.

Citing records discovered by security specialist Hold Security, The New York Times reported on Tuesday that a Russian crime ring has managed to gain access to more than a billion stolen Internet credentials. The stolen credentials include 1.2 billion password and username combinations and more than 500 million email addresses, according to Hold Security, which describes the breach as potentially the largest ever."

But what is the real story here?  

Hackers in order to crack other passwords need lists of words that mimic the passwords people actually used.  With this hack, hackers now have a list of passwords picked by actual people.  This will make it significantly easier in the future for hackers to crack user passwords.

Good reading on how to become a password cracker.  http://arstechnica.com/security/2013/03/how-i-became-a-password-cracker/

So the question I ask now have passwords become obsolete?  Especially in light of how easy it will become to crack passwords?  Leave your opinion in the comments section below.