There are 'stateless' password managers that work that way. It does not really protect against malware. If your user account is compromised by malware, what holds them from reading out your password and applying the same procedure to obtain password for interesting sites? You'll still be updating your password everywhere.
What you want is a second factor that uses a challenge-response mechanism with user interaction (e.g. U2F Yubikeys that require a finger press to start the challenge-response).
