I would not go so far and say this is the only thing that makes sense. It made sense for my service, because it runs in a context where people can trust me to n

I would not go so far and say this is the only thing that makes sense. It made sense for my service, because it runs in a context where people can trust me to not copy the password suggestion and store the clear text. But every application context is different, so maybe offering a clear text password for your users to choose might ring the wrong bell in yours.