Excel & Word Password Recovery

This can't be really true.

Storing 2^40 keys permuted to 2048 bits (RC4) would need 256 TB of hard disc space. While this could be possible in theory (with todays large datacenters), reading these 256 TB of data would take much longer than 3 minutes.

If you would be using DDR400 RAM in dual-channel mode, you can get around 5 GB/s of memory transfer bandwidth. So you would need at least 15 hours to transfer this ammount of data just in memory. Hard disks of course don't give you 5 GB/s, but only (in RAID0) somewhere up to 250 MB/s (or 60 MB/s for non-RAID). So it would take from 12 days up to 2 months. As you can see, this would never work with permuted keys stored on a hard drive.

Next it wouldn't make much sense. Since all keys need to be checked, one would just need to count from 0 to 2^40 and then do the permutation to 2048 bit. This would be much faster than reading everything from hard disk since RC4 key setup is much faster than a hard drive.

But you should also note that just counting from 0 to 2^40 already takes several minutes, so this company probably is using some kind of exploit.