Maybe this is why,
e-mail authentication
techweb
The verification that an e-mail message has been sent by the domain name in the From field.Called "domain spoofing," spammers falsify the From address in their messages in order not to be identified. SPF Classic, Sender ID and DomainKeys are authentication methods that are expected to proliferate. They all rely on DNS records, either to obtain sending mail server addresses or public keys for decrypting a digital signature. See Sender ID, DomainKeys and SPF
It just looks to see that the domain is an authentic domain name, there is nothing about passwords. My e-mail is being sent from an authentic domain mostly my own ISP. A valid domain has nothing to do with a password just is it a valid domain and if so then it will send the mail. Like I said I have no problems sending mail. All my ISP's have required email, but until recently (the past two years) have I used PHP mail and have been using the same ISP.
You might be getting authorization and authentication confused, I don't know all I know is that it works provided you have the right string for you SMTP server and didn't mispell your email address (which I did,and it would not send the mail, until I corrected it).