Overall, though, I'm sympathetic to the view that's sometimes expressed that Canada, the US and Mexico (and possibly even through Central and South America) should seriously think about reducing the internal barriers and strengthening the external ones. That is, share responsibility for securing non-North American traffic, but make it easier to cross between Canada, the US and Mexico. Problematically, of course, it'd never happen, at least without some serious shifts in US foreign policy. The current climate is (a) too paranoid and (b) too anti-Mexican for the US government to cede any control over security of international traffic to another government and for the US government to make it easier for, say, workers to traverse from country to country. (However, I have blogged on that issue here.)
I suppose that my point, at the end of the day, is that it's not surprising that passports are now going to be required to cross the international border between the US and Canada, because the security protocols for entry into both countries are different, hence each government has a responsibility to ensure that traffic coming from the other is safe.