Depends. Is this a stand-alone Win2k machine, or is it a part of the domain? If a part of the domain, is it a member of a NT4 domain, or a Win2K Active Directory domain? These specifics make a difference.
The reason, though, is the "Minimum Password Length" permission is set to 0. When you do not specify how long passwords must be, then users can have a blank password. Unfortunately, having a minimum length of 0 is the default setting. You have to change it.
So, to do so depends on the domain membership and its structure. But, for an example, I am going to assume that the Win2K box is a member workstation of a NT4 domain.
To set the password length, go to your PDC and open up User Manager for Domains. Click Policies -> Account.
You are gonna see a bunch of password and account settings. There is a section called Minimum Password Length, with 2 options below it: Permit Blank Password and At Least X Characters.
Select At Least X Characters, and change the radial to a minimum number you want passwords to be. If you want your network to be somewhat secure, I recommend 8 characters. Click OK.
Now, this sets so that any new passwords added must be at least X characters in length (to whatever number you choose).