No, password hashing is not bad. It is a better way to protect user privacy.
Big corporations tried to impose single sign on for a long time. It started at the end of the '90s with Microsoft Passport which at the time failed, but was rebranded several times. Centralised sign on is an effective way to track user activity. Note that it is not necessary for the sign on provider to know what the user is doing after login. A list of all the services used by each user is already enough to provide useful metadata. A lot of big data analysis currently is done using only metadata because using detailed data often leads to exponential complexity. However metadata already provides a lot of useful information.
Some users may not care about their privacy, but already a lot of internet sites offer the choice to login via a centralised ID provider or not. The users who choose to use a local account are those who care more for their privacy. Forcing them to provide their private details to a centralised ID provider is a bad idea.
The:
Password hashing is bad.
rules you posted are malicious. Sending the password to a local of a centralised server from a security point of view changes nothing. Beyond that the siplesimple concept of hashing is the safest way to handel the passwords.
BTW The source document you posted does not match the content of the question.