If there is anything I have learned, it is that most humans have a desire to throw out the old and accept the new without any sort of hesitation.
Then you have not learned anything, padawan. It may be commonly true of your peers, but it is not true of most humans in middle age or later, especially those of less tech-friendly varieties.
*OK, maybe it's just in the teacher's edition.
That'd be a more appropriate place to do an OS install, but no: I expect you to lift your head and look around before typing, to see if anyone is staring at the screen. Because if there are other people in the room, and you're really that concerned that they'll be snooping at your root password, they can just as easily look at your hands on the keyboard.
The practice of masking passwords in all circumstances is a perfect example of unthinking That's How We've Always Done It Syndrome. It dates back to the days of printing terminals, where everything you typed was dot-matrixed onto a roll of paper as you went. It was a very good idea and very important that those passwords not be echoed back to the user, because they'd be preserved on greenbar paper for someone else in the terminal room or computer lab to find.
But most password entry isn't done in that context anymore. With password-saving features on web browsers and smartphones, it's often done once, then left alone; people can easily take a quick look around to make sure no one's looking when they tap their e-mail password into their smartphone during initial setup. A login screen that doesn't echo the password as you type it, but has "remember my password" checkbox... makes no sense whatsoever. But they're programmed that way, because That's How We've Always Done It. Not masking the password when you initially set the password is a good idea because it's really not that difficult to make the same typo twice in a row, and once you've done that with the root password on a new system, you're screwed.
I work in an IT office, and every day I get multiple calls from users who've locked themselves out of their accounts because they couldn't see what they were typing. Caps-Lock is a frequent culprit, and if I had a dollar for every time I've asked a user to check that and try again (and it worked), I'd be able to buy pizza for the whole department every Friday.
There are certainly circumstances where masking the password is a good idea. Kiosks where the user is likely to have strangers standing in line behind her, portable devices that are likely to be used on coffee shop tables, and high-security environments of various kinds. But not all password entry requires that level of looking-over-your-shoulder-but-not-really-because-you-can't-be-bothered-to paranoia to applied. If I'm logging in to Netflix.com to add a movie to my queue, I don't need the kind of password-masking secrecy needed to log in to the medical-records software used where I work. And it's high time someone had the critical thinking skills to start making this judgment call on a case-by-case basis.
Patently and obviously false. Engineers are good at engineering. Designers are good at designing. While it's perfectly possible (and maybe even common) for someone to have both skill sets*, they are not the same skill sets, and there are oodles of engineers out there who are utterly crap at design, and designers who are just as bad at engineering... and the world would be a slightly better place if more of them were aware of that.
*With one college degree in Computer Science, and another in Illustration, I may or may not be one of those people (I think I am), but I at least know what the skill sets are.