I got confused by this as well. What's happening is that the email address he used already has a Persona account. If your email address isn't known to Persona

I got confused by this as well. What's happening is that the email address he used already has a Persona account. If your email address isn't known to Persona it will ask you to create a password, which is cool. Otherwise, it will just bring up a password box with your email address just above it. I must have used BrowserID once when it was launched, because what the OP got happened to me and I was just as confused. It might not be a problem in the future when it's more well known, but it would be nice for it to have an indication that they want your Persona password, and not your email password.