Anytime your password is visible in plain text is bad. This includes when it's stored in a database, written on a post-it and pasted to your monitor, or anywhere else.
As a software developer, there is no reason for me to ever show you your password in plain text even while it's being entered. In my opinion, the security benefits of the mask definitely out-weigh the usability costs.
Just like how your stored passwords are visible in plain text in
Firefox and
Chrome to anyone with a few seconds alone with your computer, showing them in plain text while entering them into passwords fields is a horrible idea.