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This is why, so I've heard.
Authored by: memoryhole on Jun 04, '01 03:48:22PM

In a word: AppleTalk. AppleTalk has always been restricted to having a password with a maximum of 8 characters. Apparently, Apple felt it necessary (to make things consistent, I guess) to restrict everything to 8 characters, in order to make AppleShare serving and client applications as simple as possible.

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