It is possible in closedsource games, yes. However saying "it is easy too" is simply not true. Editing the client source code and recomiling versus memory hacking a high-profile game like CS:S are just totally different levels. I don't consider latter to be 'easy'.
Problem with threating every client data as untrusted is the additional required bandwith. The more data the client has to send (to make the server do the right decision) the more LAG you get, which is extremely undesireable in all games, especially in FPS'es.