> The days of passwords are over. You’ll enhance security and ease of use in one fell swoop by ditching those passwords and employing public key authentication for your user accounts.
ssh keys are better than passwords only because they contain (and require) more information. On the other hand, if your dev's machine is lost or stolen or compromised, so is your ssh key. This is especially a problem in environments with a shared account with full access, as you have. So, it's probably a good idea to make sure you're using a passphrase with your ssh key (during ssh-keygen), unless you need a passwordless login for a shell script or other automated remote system.
> passwd deploy: Set a complex password - you can either store it somewhere secure or make it something memorable to the team. This is the password you'll use to sudo.
Not necessarily. Anybody with access to the "deploy" account can use "passwd" to change its password to anything they like. (Edit: I'm wrong on this! passwd does require your current password; I've just gotten used to doing it for other accounts via sudo, which doesn't.) Changing the passwd on your own account doesn't require sudo. For this reason, I think it's better to simply give deploy nopasswd access to everything, and then delete and lock deploy's password to prevent it from being used at all (passwd -d -l deploy). You'll have effectively the same amount of security, but this way nobody will need to remember or retrieve a complex password, and you'll prevent, say, some accident in /etc/ssh/sshd_config from making deploy remotely accessible via a password.
You can do something better than this though, but it takes a little effort. Deployment is often the same steps over and over again (an rsync or an occasional apachectl graceful in my case). You can give the deploy user nopasswd access to only a shell script that's writable only by root; this way, deploy can still do 90% or more of their job without ever being given system administrator rights. You do have to be a little careful writing shell scripts though -- $* and "$@" still trip me up once in a while.
> Logwatch is a daemon that monitors your logs and emails them to you. This is useful for tracking and detecting intrusion.
This seems of dubious security value to me -- probably better as a generic sysadmin tool, so that you get annoyed by noisy logs and seek out and fix minor problems instead of ignoring them. Thing is, if someone does get access to your server, you pretty much can't trust it at all anymore. With services like Linode, you're really better off just launching a clean new instance, re-running your setup script (if you have one), and moving your data over.
I had to deal with the occasional intrusion in some pretty icky servers at an ISP once upon a time. We used rkhunter for a while, but I learned pretty quick that successful attacks against Linux servers are plenty enough sophisticated to alter all the basic tools that you would use to detect and remove the rootkit.
There is one caveat: I've been playing around with the idea of setting up rsyslogd to route syslog messages to mysql, and then using mysql replication to have an up-to-the-second offsite copy. I'd combine that with Snoopy (https://github.com/a2o/snoopy) or something similar. The point isn't to try to clean up an intrusion, it's to see how the intrusion happened so that I could close that hole. I haven't gotten around to setting this up yet, so I can't say anything terribly smart about it.
Finally: if you're going to have a problem with unauthorized access to your Linux or BSD server, it's probably going to be via one of its services, not via brute force ssh or anything similar. So, if you're concerned about this kind of stuff (and if you're being paid to be a sysadmin, you have to be), then you need to spend most of your attention making sure that your various services are set up correctly (apache/php/mysql/postfix/dovecot/spamassassin/etc. in my case).
The big problem with ssh keys is not being able to enforce ssh key passphrases on users. From the server perspective, you have no idea if the user has set up a passphrase. There are security standards which mandate certain kinds of passwords (complexity) and are silent on asymmetric keys, so you couldn't use keys in those environments.
The old solution was to do some post-login hack to require a password as well (e.g. to su), or do a VPN (which could have multiple forms of auth) and then ssh with keys after that, but the newest ssh (and I believe commercial ssh for a long time) now supports requiring multiple authentications per login, so you can do ssh key plus passphrase.
There are also DLP/etc. reasons why ssh can be problematic in some environments (i.e. where you're required to log/analyze actions taken by users, particularly admin users). The solution there is to use a bastion host and ssh in and then ssh out, with the user account locked down to log. SSH Communications (the commercial ssh people) have an interesting ssh MITM box which essentially does what all the SSL x509 MITM CA things do.
SSH keys do not satisfy a "fail closed" security model: they're there unless you explicitly remove them (and keep them removed). Certificates, tickets, and other expiring credentials eventually go away and lock users out unless they're explicitly renewed.
People often consider ssh keys to be a panacea and to think of passwords as outdated
I've also been using Duo Security as my new 2FA solution and I like it a lot (it also has support for using Yubikeys to provide your OTP.)
Every single auditor I've worked with has given a pass when they saw we were using keys instead of passwords. Do you also fail audits because your RSA token is only 10-12 digits?
You could, I suppose, demand users upload their private key (shudder) to the organization so you can check if it's encrypted; this has its own flaws (primarily that you've just taught your users to be giving with their private key), and you still can't enforce passphrase strength well.
I don't have a particularly high opinion of most security audit standards, though.