You are correct they changed the law recently that if you travel back and forth between Mexico and Canada you had to have a passport.

As of Tuesday, Jan. 23, all U.S. citizens are required to have a passport for re-entry into the United States from Mexico, Canada or any other place in the Western Hemisphere when traveling by airplane.
U.S. Citizens now need papers but the masses of non-citizens usually don't arrive to this country by plane.