Point is simple:
Task: Phil, please create a new User for a new System Admin or Regular user and email him the details.
How many steps you'll need to do? At least 3 (plus all in separate places)
1. Think of the password and put it in
2. Create a User
3. Email the User his details.
If we do what I suggest we can do this in 1 simple step from the same Add User step and user will get his Username/Password sent by In-Portal.
Again, the functionality will be useful NOT only when we have auto-generate password enabled for the Front, but in all cases.
I hope it explains things a bit better.
DA.