Yes, but if we have hash(plaintext + site_specific_salt), then even if I use the same password for different sites and the hash from one of them is intercepted, it still takes a while until the others will also be compromised. I didn't say the system was perfect, but still better than sending the password in plain text.
I believe a similar idea (use hmac(url, password) as a password for websites) is used to great effect by a firefox plugin.
Also, please do not use hash(x + y), use hmacs. String concatenation in hashing breaks some of the complexity guarantees and will lead to your hashes getting cracked faster then you'd expect.
