People are stupid if they don't realize a password is like a key.
They do, and the problem is that they treat it exactly like one. When you buy a lock, do you immediately re-key it? No: you use it as-is. Now maybe if the key looked very suspicious, like say it was a perfect sine or square wave or it was completely smooth, then you might ask the blacksmith whether that's normal. I bet those shopkeepers would be asking the same of their POS installer if the password was "123456" or "111111".
But to their (and my) untrained eye, "166816" looks reasonably random. It looks as random as my Schlage house key does. Maybe there's a locksmith forum where experts are making fun of me for not changing my obviously default lock. After all, they can tell at a glance that I have the standard factory issue! How stupid am I for using it without making my own pattern!
No, I think you're exactly wrong. People think of these passwords as keys. They use the ones manufacturers give them. They hand them out to the same staff that have keys to the front door and cash drawers. They don't routinely change them when people quit. They don't audit their usage. They treat them just like the little medal danglies on the ring in their pocket, no more, no less. We've done a very poor job of telling them why they should think otherwise.