[ItsMattyG]

Hmmm, would a better way to do frictionless registration be to sign them in, then send them an email with a link to set their password?

[Kneedler]

Any method that does not store passwords in plain text would be better.

I'm not sure what sort of modifications you have made to wordpress, but I can tell you that the default registration system hashes the passwords to store them securely. If you use that default system to generate the passwords, I would think that is safe.