Because it may imply you're storing the password in plaintext. If not, it still isn't necessary for the password to be displayed anywhere besides your own brain.

Because it's good practice, and some users use the same password for more than one site. If you blame that on the user, you're never going to win, since the human mind has limited capacity for remembering such trifles as passwords.

Besides, how do you know what information is going to be stored here? Some people might want to use it for Top Sekrit Files.

I'm sure I'm not the only one who uses the same password for multiple sites.