Bouncing Zabaglione Bros. said:
This is all some of the reasons why I chose to go wired rather than wireless. Wireless is just too easy to break into, and there are any number of reasons why people would do it, identity theft, bandwidth theft, spamming under your IP, etc.
I agree that WiFi is inherently insecure (if that is what you meant). I would even go as far as saying
all communication is inherenly insecure and this is why encryption exists. It doesn't solve the problem, but it helps. I hope I did not come across as saying "don't worry." That is quite far from what I intended. However, I think when dealing with an insecure medium, like WiFi, there is little reason to go overboard in upping bitness in things that ultimately do very little to protect you, like WEP. This is just false security. On the other hand, you may get 80% of the benefit at much lower levels, choosing to trade performance for a false sense of security. With WEP, I really don't think a 128-bit key is going to protect you any more than a 64-bit one if someone is looking to get in.
Going, or staying, rather, wired is one way, but WiFi exist for a reason. Not everyone can have wires for all their devices comfortably. WiFi is here to stay and now it is an issue of how to deal with it, including its flaws. Because it is a broadcasting system you are inviting evesdroppers. The best you can do is to screen off as many as possible. It's unreasonable to employ a system where you get 1Mbps actual data transmitted for every 10Mbps of network bandwidht due to security overhead. Even then, I am sure that a cracker directly targetting you could find a way in. You have only reduced the number of candidates until the cracking process is automated. I liken this to not ever having sex because of threat of disease. Sure, you can avoid those diseases, but then you are missing a fundamental part for why the system exists (and...you'd probably contract some other weird disease anyways and wonder why you didn't at least have fun getting it).
So, a WiFi system with WPA, MAC filtering, and no SSID broadcasting is as good as it gets and this is what needs to be done. I also recommend switching WiFi off when not in use, but that may be more problematic than some people want to hear. Mind you, many home APs seem to have a tough enough time going 24 hours without a reset anyways, so this may be a small issue.
To answer the question of the OP, I think the answer is very simple: most people don't realize they are exposed. They have a tough enough time trying to connect their laptop to their home AP without consulting the manual and phone support that they never stop to think how exposed they are. I am sure many people are thinking "but who could possibly guess my IP?" Not realizing that this IP address is part of a greater system and can be derived.