Do you mean “dangerous” as in “insecure”, or as in “will affect the platform’s popularity”?
I can agree with the first, to some extent — because if someone is watching you type, he can also pick up the password by looking at your fingers (or even recording them on video, if we’re being completely paranoid). On the other hand, if nobody is looking over your shoulder, this is much more error-prone than typing your password the second time.
As for the second:
I must admit it seems completely illogical to me.
Also, speaking of examples of such system, it is used in OSX (perhaps in other systems too) when you are entering the WiFi password. Not a website, of course, but still.