More Secure password handling?

I can’t think of a way to start this thought other than to come out with it:

Have there been any thoughts about making the password handling in WP a little more secure? It seems that just using a straight md5 hash is a little outdated. I would think that it wouldn’t take too much work to add a dynamic salt, as well as maybe a customizable salt somewhere in the admin interface…

Am I way off base here?