Not really. You don't want passwords in plain-text traveling around pipes or sockets with easy to sniff system-calls. You want a secure channel between your password manager and the application. Keepass2, for example, copies your password to the clipboard and automatically erases the clipboard after a short timeout. (True secure channels don't exist yet in any OS as far as I'm aware.)
Upon reading the manual, steel can communicate with X clipboard (by xclip), but it passes the passphrase through a pipe. It never clears the clipboard. To be "secure", it'd need to be an X11 application (i.e., NOT command-line) which would participate in the X11 selection protocol and provide password only when the user actually tries to paste it.
In addition, you need to "open" and "close" the steel database before using it. The manual does not explain what "opening" and "closing" does however. Does "open" temporarily decrypt the whole database?
Security is more than just applying strong crypto. I don't like the general design of this application; the discussion of general security concerns (side-channel attacks) is completely missing.