Did you read the manual?
Help! I've broken my board!
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Changed my password to a previous one, and it wouldn't let me... how silly is that? This isn't a bank account, it's a freakin discussion forum!!!
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Considering also, that you are an administrator and thus have access to data which may be confidential. I personally don't think its a waste.
This feature is standard on other applications too. You should be able to turn it off when editing the usergroup (or in vBulletin Options, I can't remember exactly) but you shouldn't really be using an old password anyway.