I checked and this is no longer the case in Ubuntu 12.04.

If this happens to you in Ubuntu 12.04, please set status back to New
and provide more details.

** Changed in: network-manager (Ubuntu)
       Status: New => Fix Released

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https://bugs.launchpad.net/bugs/558374

Title:
  Network manager requires password for creating unprotected ad-hoc
  network

Status in “network-manager” package in Ubuntu:
  Fix Released

Bug description:
  Binary package hint: network-manager

  You can't create a new unprotected wireless network normally. Picking
  security: None leaves the "Create" button ghosted out.

  Steps to reproduce:
  Click the network-manager applet. Pick Create New Wireless Network...
  Leave Connection: New...
  Type in any Network Name:
  Change Wireless Security to None.
  Ponder what to do next as all other options vanished and "Create" is still 
ghosted out.

  Workaround:
  Pick Wireless Security: WEP 40/128-bit Key
  Type in any password (say, 10 0's)
  change Wireless Security to None
  Click "Create".

  Network Manager Applet 0.8, Ubuntu 10.04 Netbook Remix

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