Hello,
We require that users specify their user name and password because we
need a way of verifying that you are who you say you are, and that you
have access to the account in question. There are other ways of doing
this that are better suited for web-based applications, like using
AuthSub or OAuth, but the AdWords API does not support those methods
of authentication. In any case, I don't think they'd be solutions to
the question you raise.
In AdWords API v2009, you just need to provide a authentication token
when making API requests and that authentication token is only valid
for AdWords API requests, but that token does expire eventually and
you have to renew it by providing your email address and password. You
could try to put together some automated way of updating the
authentication token stored on your hosting provider if you use v2009.
It's also worth pointing out that your Developer Token is used for
billing purposes, and should be considered sensitive information as
well.
I think it boils down to needing to use a hosting provider that you
trust.
Cheers,
-Jeff Posnick, AdWords API Team