Earlier quoted context omitted.
No, it isn't. If a user's password leaves the web application in any form other than a hash, something nonstandard and probably bad is going on.
Hashing can be done in a stored procedure. Maybe the organization decided that it's better for the DBA to handle hashing. Nonstandard maybe but not necessarily bad.
No, it's unambiguously bad. You're transmitting a cleartext password to a system which doesn't have a business need to know it, and which wasn't designed to process secret data. There's a substantial risk that the database may leak that data in some unexpected way, e.g. by logging it when an error occurs or by showing the parameter in a process list. Worse, a stored procedure can potentially be covertly modified to store or exfiltrate the password while hashing it.