Would it be difficult to add a Firefox add-on that lets you log in supported websites using private/public key authentication? So, instead of having to create a separate password for each website, one would just give them his/her public key.
No plugin needed.. startssl do it and it works on anything pretty much, as long as you have the root CA (which for them is easy as it's in the default set that ship with the OS, but might have to be transmitted out of band for a bitcoin CA).
They generate and send you a client key that gets stored in your keychain (this is trivial point and click stuff on most browsers). Then when you visit the site again it requests that cert. and you are logged in. If you don't have the key, you don't get in.
The only reason it's not used more widely is more inertia than anything else... people are used to usernames and passwords.