The Luke Wroblewski writes on his blog
Passwords on the Web have long been riddled with usability issues. From overly complex security requirements to difficult to use input fields, passwords frequently result in frustrated customers and lost business. The situation is even worse on mobile where small screens and imprecise fingers are the norm.
I couldn't agree more. With mobile devices, the vast majority of the time the device is being viewed by only one person. Having them suffer through the password masking feature is a UX failure.
Mobile app frameworks should incorporate controls that let the user decide when to have the extra security of password masking.