Just to add some more context, these were used back in the day at chill areas of hacker conferences.
Back then wifi (if available) was not very reliable, and battery tech less advanced.
People carried network cables and extension cords in their backpack.
It depends on the qr-code scanner you have on your phone. The one on my android shows a button 'connect to this network'.
In regards to security, you are completely correct. But this is to be used in cases where one would put a paper with the password on the wall, think of coffee shops. Saves some typing. Or you can put a card on your coffee table to help out your house guests.
Well, it wasn't "the record companies" as a whole. The creative nomad player was during the same period and had no such limitations.
Sony, being a record company and a hardware company, limited their players in this way. And basically paved the way for other companies to take over the market.
Sad because their walk-man was basically the standard before, and sony makes some good hardware.