[eluser]elvix[/eluser]
There's no technical security reason for using a password-type input field, this type of field only hides the characters from the user, it has no effect on whether the password is transmitted securely (you'd need SSL for that).
That said, it is convention to use the password and password_confirm fields, so while I personally agree that it's not necessary and actually showing a new user their password might help them remember it (vs. typing blindly), it's not a good idea to surprise new users with techniques they might not expect or understand.
In this case, I think the risks involved in confusing new users probably outweigh any benefits.
</2cents>