admin's "add user" needs passwords?

Why is it that the "add user" page requires the admin to come up with a password for the new user. This is nonsensical for my site, which is set to "Only site administrators can create new user accounts."

Is there some kind of module or modification that I could make that would somehow streamline the process for administrators to create accounts for new users. It would be better if the admin did not have to come up with a password. Perhaps a randomly generated password should be default. Or maybe the new user should just be forced to pick a new one when the registration link is pressed.