A - The question asked for equipment, not the entire software package to compare passwords. Swipe could be used as the equipment with the software solution using it to filter out bad passwords, much in the same way that your keyboard is linked to your operating system.
B - I agree with you for different reasons. I know this afternoon I've been saying encryption might be the answer, but in reading the question again this isn't 'equipment' - it's software.
C - How do you know their accessing a password-protected file? What if it's a file they're allowed to access? Possible, but absurd.
D - I agree with you here - possible but an incredibly long shot.
Edit: I have an exam tomorrow (Revs) so I'm retiring from this date. I think any of them could have been right, you never know what the VCAA is saying. This question should be taken out from the marking.