I’m glad someone with a little more klout than I have has decided to weigh in on this. For those of you not familiar with his work, @chronic is one of the more active developers in the iOS jailbreak community.
I weighed in on this issue before migrating off Tumblr, and there’s my old Tumblr post for posterity. He confirms my suspicion that their team uses readily available, open-sourced jailbreak exploits to get root access to the file-system, and elaborates on the weaknesses behind their password cracking algorithm. He also points out that due to the tool that they’ve elected to use to achieve their jailbreak, this doesn’t work at all on new devices.
Like I said before. Gilded shit.