My personal utility would not be equally well-served - because it would involve finding & installing said plugin.
Meanwhile that random person who can't be bothered to click on the 'mask password' checkbox is just someone I don't really care about. His 'suffering' is entirely avoidable.
On a more serious note - I believe the number of individuals who benefit from this change (everybody typing in a password) would receive sufficient benefit to outweigh the cost incurred by the few who would bear the burden (someone giving demonstration and forgetting to click 'mask pw' button).
Or - we might just have a browser setting for it.
