Fortunately, it's not hard to get around this on desktop (for Mac at least) with an applet like Paste Typer. But when I see this on iOS it infuriates me. I use 1Password to generate strong (long) passwords and having to type them out manually is a huge PIA.
The annoying one on iOS is how often it makes me re-enter my Apple ID password. In a modal, of course, so it's impossible to bounce out to 1Password to copy the (very long and complex) password without dismissing the modal first. Sometimes I'll get a "re-enter your apple id password" modal at some random time while I'm doing something else, dismiss it to go get the password, and then have no idea how to get it back because I don't know what triggered it in the first place...
On Android, KeePassDroid registers as a keyboard to prevent other apps from retrieving your passwords from the clipboard. Not super familiar with iOS, but it seems like a good practice anyway, independent of its utility in circumventing asinine "no pasting" policies.
1Password does too but I've found that the Chase app and the Google Account manager all fail silently when using the keyboard to paste in your password. I called up Chase and they had no idea about why it wasn't working, although they could see my login attempts.
I only was able to figure it out when I changed my gmail password to something stronger and couldn't log back in and had to google the problem.
I have a Microsoft touch mouse, and I can program macros on the touchpad's regions. So if I press the top/middle part of the thing, it just types my password :)
In fact, now that I'm thinking of it, I can use it to trigger a script which will type whatever is in the clipboard. Silly javascript script kiddies think they can control a user's behavior like this.
