Sorry to hear this happened to you. I've had people try to pick my pocket in Paris and New York (and caught them by the wrists) but never here in BA.
That said: In big cities in general, use front pockets and inside pockets for valuables. I see a lot of Americans here with fat wallets or phones sticking half out of their back pockets and think, boy you're asking for trouble. Never, ever take your passport out with you in a foreign country unless you are going to and from a place you absolutely need it, like immigration or the bank. And if you are carrying something valuable, be aware of it, keep your hands away from your face and close to the pocket where it's being carried. This is something I picked up from growing up in LA and New York. I've lived/traveled in 34 countries... it's the same everywhere.
Some countries, like Thailand, have laws that say you have to carry your passport on you at all times as a tourist. Don't do it. Not worth it. When you go out, carry a color xerox of your passport's photo page. You will never have a problem with the police from that. Carry one (1) debit card and as little cash as you need. The only country where local police have actually asked to see my passport, ever, was Germany, and it was a bizarre and rare situation. If you are asked, you explain that your passport is back in the hotel safe, because it's too dangerous to take it out in the street with you. Trust me, the American consulate will respond if they throw you in jail for not carrying your passport a lot faster than they'll respond if you have your passport stolen. Don't ever sign the back of your credit cards, either. Take no guff from anyone that says you have to sign them. You don't. Not signing them gives you time to cancel them and identify the false charges in case they're stolen.
The US State Department has a website at http://travel.state.gov with safety & security concerns listed by country. This particular "mustard on your back" scam is probably the only thing that's copy/pasted for almost every single country in the world for a reason. It's very common. It's also easy to avoid. When someone walks up to you, stick a thumb in your pocket out of habit so you can feel if there are hands are going there.
It's a big world and there are plenty of bad folks but I have to strongly object to the guy who said he runs whenever he meets a "friendly Argentine". People in this country are extremely friendly and they are by and large very nice people. They can come off as almost too solicitous -- "come to my house! Have dinner with my family! Let's camp at the river!" From someone you just met. But they are generally just happy to meet you. That doesn't mean to let your guard down completely, but it's really uninformed if you think everyone being friendly with you in this country is trying to take advantage of you. That's definitely not true, and I hope your view of the country isn't changed by this. Like I said, it happened to me in Paris and NYC too.