It's not OK for two reasons, one a tiny bit paranoid the other much less so
1. The server operator might accuse you of doing something offering as proof a record that "you" logged in, but actually they knew the password so it was them.
This seems kind of silly if the server is a forum about a video game you like and the consequence of the alleged wrong doing is a permanent ban. But if the server is your bank, and the consequence is they convince a jury you tried to commit fraud and you go to jail when actually their employee has stolen your money using access to your password... that's pretty serious.
2. People re-use passwords. They know they shouldn't, but they do anyway. So "of course" the operator of "Puppy Fan Forum" knows your password, but it's also the password for your Amazon account, and next thing you know there's $1000 of dog treats billed to your credit card going to the operator's home in Ohio.
1. The server operator might accuse you of doing something offering as proof a record that "you" logged in, but actually they knew the password so it was them.
This seems kind of silly if the server is a forum about a video game you like and the consequence of the alleged wrong doing is a permanent ban. But if the server is your bank, and the consequence is they convince a jury you tried to commit fraud and you go to jail when actually their employee has stolen your money using access to your password... that's pretty serious.
2. People re-use passwords. They know they shouldn't, but they do anyway. So "of course" the operator of "Puppy Fan Forum" knows your password, but it's also the password for your Amazon account, and next thing you know there's $1000 of dog treats billed to your credit card going to the operator's home in Ohio.