This can absolutely be done.
You would create a recordset filtered by the entered email address so that you could get the user data including the password from it.
Then apply the redirect if empy native Dreamweaver server behavior to redirect back to itself probably with a url parameter you can key off of to display an "email not found" error message.
Then apply Universal Email with the recordset data referenced for displaying the password and using the TO from either the recordset or the form field where it was entered.
Make sure the order of the server behaviors in the Server behaviors panel is:
2) Redirect if Empty
3) Universal Email
That should do it.