When the password entered on the Remote Configuration (see attachment) is wrong then the plugin keeps trying to log in to SVN instead of failing fast and returning an error message. If the SVN is configured to use the user's windows credentials for authentication then due to the behaviour mentioned above the user gets locked out due to the several login attempts performed by the plugin.
Eclipse-cs version: 5.5.0.201111092104
STS version: 2.8.1.RELEASE
Eclipse platform: 3.6.2
JDK: 1.6.0_29-b11
OS: Windows 7
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Hmm, the plugin checks on 401 responses from the remote location and doesn't retry them (see http://eclipse-cs.cvs.sourceforge.net/viewvc/eclipse-cs/net.sf.eclipsecs.core/src/net/sf/eclipsecs/core/config/configtypes/RemoteConfigurationType.java?view=markup , starting around line 300).
Is it possible that your SVN doesn't respond with 401 on failed authentications?
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I have double-checked the SVN and it responds with 401 on every failed attempt