Usability 101

I cry nerd tears every time I'm presented with drop-down menus to specify my date of birth or country of residence.

I struggle to make sense of how these usability nightmares can thrive in a medium where the demand for ease of use is nearly unparalleled. Am I missing something?

It's particularly upsetting when the site doesn't automatically parse the numbers from the input, and rejects "-" or "." as invalid delimiters.
The truly evil web input sin, in my humble opinion, is always rejecting passwords which are deem to be "too complex", simply because they contain non-alphanumeric characters; this lies directly in the face of modern security standards.
Oh man, yeah... "your password contains invalid characters" is just not cool at all. I can kinda understand rejecting a 100 character long password, but in most cases, passwords should only be rejected for being too insecure rather than the other way around.

As for country drop-downs though, what would you replace them with? Yeah, scrolling through those is a horrible mess, but it'd be kinda hard to validate a county text field. Not impossible, but hard. There's a lot of country abbreviations out there. Plus, someone might enter, say, "Islamic Republic of Iran" instead of "Iran". Similarly, "United States", "United States of America", "America", "US", and "USA" would all be potential inputs.
An easy way to ensure proper country or address checking is to use a little Bayesian statistics to probabilistically determine the country based on user input, matched to a database containing a list of countries, and (ideally) multiple aliases for each country (properly related or inherited, depending on DB).
I say Bayesian because the percentage chance of accurately parsing the user's input can come from a combination of sources. In your example of 'Iran' or the 'Islamic Republic of Iran', the string "iran" is common to both. Add to that a principality and 'zip' code, and we can narrow the selection to a single country with a significant enough percentage.
Then, if we're still not sure enough, just ask the user: "Did you mean, 'IRAN'?"
I think passwords should be left untouched. I'd rather warn the user that their password choice is considered insecure than require them to choose another one.

On the subject of country selections, you both make solid points. I'd probably solve it by offering a list of suggestions that change based on the current input (google-esque), but Sebastian's solution might be less obtrusive.
It's not so hard to deal with country drop down menus. Just activate the menu and start typing the name of the country, and it will go to that name.
Rauli: Surprisingly few are familiar with this functionality. In their case, it's nothing less than a usability nightmare to scroll down a list of hundreds of countries to find their own.
Johannes: the Google Suggest-esque feature is pretty nifty, but in Bob's example, one would still need a half-decent probabilistic engine in order to auto-complete "The Islamic Republic of Iran" should the user begin with "the is..." or "ira..." I suspect a combination of our two propositions would be the most usable. :)

Rauli: I *think* there are some browser and OS combinations which lack that functionality (though off the top of my head, I can't think of one). Johannes makes a great point though: most users don't navigate via the keyboard, and are left waiting for the drop-down to scroll to the bottom.
Yeah, I suppose so. I use the keyboard so much that I always forget that other people probably like the mouse better :D For me, the mouse is quite a clumsy contraption. Would love to have a touchscreen or some gesture based pointing technology :P
Stupidity, it's what fails most users when common sense comes in. Simplicity is too easy to accept. It then becomes a marketing challenge to prove a point. Everybody else is doing it, so let's do it.

Programmer lack creativity and designers lack insight. That's what I am facing.

It's my fault, I am not intelligent enough to counter those school of thought. Usability? Almost unheard of at this point!
This is the remark.