There are possibly three places where the information is vulnerable. First, the dial-up machine makes a request to the AFS server and the AFS machine that houses Ben's directory will send the file to the dial-up machine, in clear text. Second, the dial-up machine is talking to the LCS machine via the telnet protocol, so when the dial-up machine sends the file to the LCS machine, again the file is visible in clear text on the network. Third, if Ben were using the standard telnet, his password would be traveling clear-text from the LCS machine to the Athena dial-up machine. The password could be sniffed and then used to log in to Athena directly.
Kerberos has the capability of solving this problem, though. There is an option to encrypt all transmissions of a particular service with the session key. If this were done for both AFS file requests and telnet then the file would not be eavesdrop-able even with a packet sniffer. There are costs to this, though, as the CPU time required to encrypt and decrypt every transmission may hinder performance. Safe-Telneting (Kerberized Telnet) would also ensure that his password would not be sniffed during the remote login sequence.
Another, non-Kerberos method of solving this problem would be for Ben to store his recipe on Athena in an encrypted format. Thus, even if someone were to get the file either through sniffing the transmission, or even if they could get his password, they would be unable to view it. He could then decrypt the recipe on the local LCS machine to view it.