I recently forgot my password for our cable provider online account, only to discover that they sent it to us via plain text in an email. I quickly sent an email to customer support asking them if they were storing passwords in plain text in their database. I actually got a quick response back from one of their software engineers who said that due to the "application's design" it was necessary to hash the passwords in a recoverable format.
I didn't send an email back to ask if they were using a salt, but in general, I thought they were adhering to the lowest common denominator with regard to password security and recovery.
Am I in the wrong here? If they are using a strong encryption method, is this perfectly acceptable?