Of course it reduces security. It makes you resort to either 1.) typing it out manually while you can't see if you made a mistake 2.) using developer tools to set the 'value' attribute directly "SPP" discourages use of a password manager. End of story. I also see this pattern used on banking websites for inputs like an account number. This drives me crazy as well for the same reason. The computer can get it right mor…
Oh, and if you forget your login/pass/security-answers, don't worry, you can just re-register your account with the same username as before, with all new password, security questions and answers.