But what I thought was the case was that the Oauth model was just a cumbersome fig leaf allowing an application to say it never touches the users password. That is a benefit in the sense of protecting an application from itself (a well-intentioned application doesn't have to store its users password).
If Twitter really wanted to separate application authentication from Provider authentication, they could do something like have the app send you a message in twitter from which you could give it permissions OR they could give you a series of "application passwords" which you could then give to the applications (one password per privileged level, each password stays valid till you revoke one application's privilege).
Either of those would be both secure and reasonably simple BUT since it requires the user's mind to think two steps ahead, it would make the apps a harder sell and so you've got the present fake security...