Yes, they knew it was a problem because tools like John the Ripper, a password cracking software tool, were developed in the 1990s and showed that a lot of peop

Yes, they knew it was a problem because tools like John the Ripper, a password cracking software tool, were developed in the 1990s and showed that a lot of people used easily cracked passwords. (I mention that one because it's one I used back then, as a part-time sys admin.) The part which makes the text correct (or at least "technically correct") is "just how ineffective". Password crackers couldn't analyze the uncracked passwords to tell you how effective they actually were, leaving doubt.