I don't have any experience with password protected flash drives but most probably password protection is a software feature and not the hardware one. If that is the case then you can run gparted on ubuntu and delete the current partition(s) on your flash, then recreate a partition(s) and format it to your desired file system.
To install gparted use:
sudo apt-get install gparted
you can then run it System->Administration->gparted
Update:
Your disk may be failing, try running
sudo badblocks -v /dev/sdb
if the ouput from this command says zero bad blocks then try write mode test to make sure that your disk is fine. Use
sudo badblocks -v -w /dev/sdb
for write mode test.