You can't enable SMTP-AUTH for all incoming mail at all, AFAIK, since sendmail will only request AUTH for requests to *relay*. Sendmail will not request AUTH for mail to be delivered locally.
If you *can* require Sendmail to AUTH everything and everyone that sends mail to you, then you will only receive mail sent by your own users.
You could do this by using the "a" modifier in the DAEMON_OPTIONS for the MTA, e.g.
DAEMON_OPTIONS(`Port=smtp, Name=MTA, M=a')
However, this would, as has been mentioned, prevent general reception of mail, which is why it tells you not to do it in /usr/share/sendmail-cf/README:
Notice: Do NOT use the 'a' modifier on a public accessible MTA!
Paul.
