I used to use a system like this for passwords. The downfall is it depends on the site name being exactly right. For instance a naive program will treat example

I used to use a system like this for passwords. The downfall is it depends on the site name being exactly right. For instance a naive program will treat example.com and login.example.com as different sites with different passwords, which is a real problem in practice. You can work around this but ultimately it means the user has to keep some state in mind, which is "the real site name for this site that I used to generate the password". I was surprised what a pain that was back when I did this.