The interesting question is whether client software (browsers/add-ons) should offer another option. And if it did, would the Payment Card Industry auditors demand a site override the user's choices, for example by simulating a masking password field outside the default HTML widgets?
The HTML 4.01 spec doesn't dictate how passwords should be obscured, although it does suggest asterisks. I think it would be reasonable for browser vendors to provide an alternative means of obscuring passwords.
If the PCI auditors aren't happy with this, and given the leniency of the HTML 4.01 spec (I haven't checked any other specs), should they take this up with the W3C?
PCI auditors are people working for one of the 20-30-odd firms that are certified by Visa to audit compliance to the PCI DSS.