Yup, makes perfect sense to me why that design doesn't go over for a public accustomed to seeing the password mask. It would be neat if that could be a preference set in the OS for power users, but I can see that being abused and I see it no way compatible with legacy sites and applications. You couldn't make it the default, because it drops a degree of security for all users of the OS. And it wouldn't get adopted widely enough for it to be worth the effort, being more expensive to support for developers.