The table for z39.50 servers hides passwords, however the passwords can be seen in plain text in the edit screen. The passwords should probably be hidden there too. This is a concern for consortia with multiple accounts to services like OCLC. This ticket has connections to Bug 5316. Managing multiple z39.50 accounts for many users/branches.
It might be useful against shoulder-surfing by people who hang around behind you while you work and who aren't supposed to know OCLC passwords to make it a type='password' input, but the only way a consortium can keep passwords hidden from other libraries is to have only one person with the permission to edit Z39.50 servers, and no people with the permission to write SQL reports, since it's stored in the db in plaintext.