In one sense it's silly to argue about the ``true'' meaning of a word. A word means whatever people use it to mean. I am not the Academie Française; I can't force Newsweek to use the word ``hacker'' according to my official definition.
Still, understanding the etymological history of the word ``hacker'' may help in understanding the current social situation.
The concept of hacking entered the computer culture at the Massachusetts in the 1960s. Popular opinion at MIT posited that there are two kinds of students, tools and hackers. A ``tool'' is someone who attends class regularly, is always to be found in the library when no class is meeting, and gets straight As. A ``hacker'' is the opposite: someone who never goes to class, who in fact sleeps all day, and who spends the night pursuing recreational activities rather than studying. There was thought to be no middle ground.
What does this have to do with computers? Originally, nothing. But there are standards for success as a hacker, just as grades form a standard for success as a tool. The true hacker can't just sit around all night; he must pursue some hobby with dedication and flair. It can be telephones, or railroads (model, real, or both), or science fiction fandom, or ham radio, or broadcast radio. It can be more than one of these. Or it can be computers. [In 1986, the word ``hacker'' is generally used among MIT students to refer not to computer hackers but to building hackers, people who explore roofs and tunnels where they're not supposed to be.]
A ``computer hacker,'' then, is someone who lives and breathes computers, who knows all , who can get a computer to do anything. Equally important, though, is the hacker's attitude. Computer programming must be a hobby, something done for fun, not out of a sense of duty or for the money. (It's okay to , but that can't be the reason for hacking.)
A hacker is an aesthete.
There are specialties within . An algorithm hacker knows all about the best algorithm for any problem. A system hacker knows about designing and maintaining operating systems. And a ``password hacker'' knows how to find out someone else's password. That's what Newsweek should be calling them.
Someone who sets out to crack the security of a system for financial gain is not a hacker at all. It's not that a hacker can't be a thief, but a hacker can't be a professional thief. A hacker must be fundamentally an amateur, even though hackers can get paid for their expertise. A password hacker whose primary interest is in learning how the doesn't therefore necessarily refrain from stealing information or services, but someone whose primary interest is in stealing isn't a hacker. It's a matter of emphasis.