I can't see why you need ssh if you don't want to have passwords...

To me this looks like giving to a third party the possibility to login remotely to another server doing whatever they want. And the nice bit is that the third party can't even be eavesdropped :-)

This is true only so long as the third party already has access to your account on the local machine. If they do, chances are a keylogger wouldn't be too hard a thing to use in case you weren't using public key encryption to authenticate to another box. That way, they still have access, and you are none the wiser. Besides, ssh logs pretty thoroughly.

If you don't trust public key encryption, remember never to trust SSL or TLS on a web site. Secure shell is no different.

Chris