Is powweb a shared host site? If so, getting access to /etc/passwd is probably very simple for anyone with an account on that server, even without any hacking.
I wouldn't worry about it if that is the case. On most systems the /etc/passwd file doesn't even store the password hashes. The hashes themselves are usually in /etc/shadow (on Linux) or /etc/master.passwd (on FreeBSD), which are only readable by root.
How did you find out that someone got access to /etc/passwd?