@nuttyhiker
I had the same problem on my Apache 2.4 server.
You have to allow AuthConfig to be overridden in your site configuration for the IT sec .htaccess modified file to be valid.
My configuration looks like this :
<Directory /path/to/my/site>
Options Indexes FollowSymLinks MultiViews
AllowOverride FileInfo Options Limit AuthConfig
Order allow,deny
allow from all
</Directory>
Credits go to this SO question.