How to keep the client credentials confidential, while using OAuth2's Resource Owner Password Credentials grant type
Solution 1:
I'm facing similar issues, and am also relatively new to OAuth. I've implemented "Resource Owner Password Credentials" in our API for our official mobile app to use -- the web flows just seem like they'd be so horrible to use on a mobile platform, and once the user installs an app and trusts that it's our official app, they should feel comfortable typing username/password directly into the app.
The problem is, as you point out, there is no way for my API server to securely verify the client_id of the app. If I include a client_secret in the app code/package, then it's exposed to anyone who installs the app, so requiring a client_secret wouldn't make the process any more secure. So basically, any other app can impersonate my app by copying the client_id.
Just to direct answers at each of your points:
I keep re-reading different drafts of the spec to see if anything's changed, and am focused mostly on the Resource Owner Password Credentials section, but I think you're correct on these. Client Credentials(4) I think could also be used by an in-house or third-party service that might need access to more than just "public" information, like maybe you have analytics or something that need to get information across all users.
I don't think you can keep anything confidential on the client.
Nothing stops someone else from using your client id. This is my issue too. Once your code leaves the server and is either installed as an app or is running as Javascript in a browser, you can't assume anything is secret.
For our website, we had a similar issue to what you describe with the Client Credentials flow. What I ended up doing is moving the authentication to the server side. The user can authenticate using our web app, but the OAuth token to our API is stored on the server side, and associated with the user's web session. All API requests that the Javascript code makes are actually AJAX calls to the web server. So the browser isn't directly authenticated with the API, but instead has an authenticated web session.
It seems like your use-case for Client Credentials is different, in that you're talking about third-party apps, and are only serving public data through this method. I think your concerns are valid (anyone can steal and use anyone else's API key), but if you only require a free registration to get an API key, I don't see why anyone would really want to steal one.
You could monitor/analyze the usage of each API key to try to detect abuse, at which point you could invalidate one API key and give the legitimate user a new one. This might be the best option, but it's in no way secure.
You could also use a Refresh Token-like scheme for this if you wanted to lock it up a bit tighter, although I don't know how much you would really gain. If you expired the Javascript-exposed api tokens once a day and required the third-party to do some sort of server-side refresh using a (secret) refresh token, then stolen api tokens would never be good for more than a day. Might encourage potential token thieves to just register instead. But sort of a pain for everyone else, so not sure if this is worth it.