The grid can't be TOO hidden, and neither can the passphrase.
Sorry. Sloppy choice of words on my part. Rather than being hidden, the grid from which the passphrase on "hushmail" is generated is a "blind" grid. Would this Magic Lantern softward be able to pick that up - not even the user knows what his passphrase is in this system.
You're absolutely right that nothing can be "TOO hidden;" any security system that one person can devise, another person can break, given sufficient time and motivation.