I wouldn't call resetting passwords an "abundance of caution" in this case. It's very likely that the attackers are able to retrieve passwords when they have the SHA1 hash and the salt (not exactly by decrypting though).
Do they say somewhere that they're only using sha1 though? That's sort of what I meant: if bcrypt or scrypt is used, with an appropriate work factor, the risk should be very minimal. The fact that they're assuming it's not suggests they are using weaker encryption.
Ahh thanks. I read the email they sent out, which had very similar content, but omitted that bit. Just skimmed the post itself, but obviously missed that key info.
Interesting that they don't include strengthening their encryption (ok, hashing) in the list of steps they plan to take, but presumably they will.
My god, I swear they're ninja editing the thing on me! I'm really not normally someone to comment before RTFA. Thanks for patiently leading me through it. :P