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This is because CON is a MS-DOS device file. You cannot create a directory with this name for the same reason you cannot create a directory called COM1 or COM2 etc or LPT1.
Because they are reserved for MS-DOS use.
Imagine trying to create a directory called "C:" and think of the ensuing problems from doing that. This is also why the character : is invalid for a directory/file name.
"Bush Hid The Facts"
Opening the file shows me the exact contents that I saved into it, no change.
I think it's because when you log on your machine cached credentials are checked first. If no cached credentials are found, then the normal conversation with SAM is taking place and it is more time taking.
They could lock you out permenently, but a total lockout was probably deemed too inconvenient. The compromise appears to have been to add a longer delay (5-10 seconds) if you try enough incorrect passwords, also 1980's era standard practice, and still in there today.
Like you said, simple, but effective, but only at frustrating brute force cracking. Nobody even tries that anymore, but if they took it out, somebody probably would
We can program with only 1's, but if all you've got are zeros, you've got nothing.