Sign Up. Email. Password. Reuse.
Put yourself in the mindset of someone who isn't familiar with the way the Internet works. They have an email address with their ISP. They have their email address and their email password written down on a proverbial post-it.
At some point, they end up on the sign-up page of some popular web site. In many cases, that's the site's home page when the user isn't signed in. The page asks for their name, email address, and password.
What does our hypothetical user do?
They enter their name, their email address, and... their email password. They don't even realize that the password on this site could be different from their email password, so even if they are vaguely aware that they shouldn't reuse their password across sites, they miss that opportunity.
They just did the worst kind of password reuse, i.e. reusing their email password on another site. They're not even stupid. They just got confused by what they saw. A bad design misled them, and poor underlying technology didn't detect that they were doing something that's not advisable.
This isn't entirely a hypothetical scenario. LinkedIn, Pinterest, Tumblr, Twitter, Yelp all have sign-up pages that ask for "Email" or "Email Address" immediately followed by "Password", with no further explanation. So does the NYT. WSJ says "Email (this is your login)" and "Password", adding potentially a bit more confusion. WaPo might be even worse, saying "Enter your password".
A few sites do somewhat better. eBay says "Create your password". Facebook says "New Password". Amazon is even better with "Enter a new password". Skype uses a plain "Password" field, but places it very far away from the email address, in a separate section where the only other field is "Skype Name", so at least there's no visual association between the password field and the email field.
None of those make it clear that this shouldn't be the email password.
As a note, many sites use field labels that are in the background of the text inputs and disappear when the user starts typing. If they user is slow, if they get distracted or interrupted, they won't even know what they're supposed to type. There's almost a perfect correlation between confusingly terse language and disappearing input labels, which might be a hint of a desire for a visually minimalist design.
What can the tech industry do?
I think there are many possible improvements. UIs could be clearer. Email providers could offer services that allow other sites to check for password re-use. Products could rely more on 3rd-party authentication and 2-factor challenges. Those are only starting points.