Unstuffing an old encrypted .sit file
I figured it out! Again, this is for a situation when you know the password.


Download an OS9 emulator. I used SheepShaver and found a perfect bundle with everything here.
If OS9 detects that the file is encrypted (i.e. the files appears with a little yellow key symbol in the corner of the icon), try double-clicking on it or opening it through "Apple File Security" under Applications &gt; Security.
If you get the error, The "Apple File Security " could not be opened because "KeychainLib" could not be found,


Go to the Extensions Manager. 
Under Control Panel, enable Keychain Access
Under Extensions, enable everything that starts with the word "Security".
Then restart.

If OS9 does not detect that the file is encrypted (i.e. no little lock symbol), you may have luck changing the file attributes as per the suggestion here (it goes without saying you should try this on a copy of your file first):


In your normal OSX terminal, use xattr -w -x 'com.apple.FinderInfo' '65 6E 63 32 63 72 70 32 01 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 01 00 00 00 00 00 00 00' yourfile.ext
This should signal to OS9 the file is encrypted and you should then see the little lock symbol. 

Try double-clicking the file. If you get the error, A file error has occurred. The file may be damaged, try dragging the file to the OS9 desktop (instead of trying to decrypt it within the directory shared between OS9 and OSX).
When prompted, say you want to decrypt the file and type the passcode. 
Unstuff the file with Stuffit Expander (in OS9).
Presto! Now you can bring the files back to the present.