What an incredibly good idea! It would probably not be too difficult to build this as a firefox plugin, so that all password fields (or all blanked out input fields) on the web will automatically get this feature... Anyone? :-)
It seems to rely on jQuery, so a Firefox plugin, greasemonkey script, or Opera userjs would need to bundle or src jQuery. Whether or not that is okay I will leave on the table for debate and discussion. :)
you can always use firefox javascript code modules to completely sandbox your javascript code, that way your jquery version won't conflict with whatever happens to be on the page. Highly useful especially if you're modifying String.prototype or Array.prototype.
