People usually want to see what they're typing (unless it's a password) :-)
The terminal accepts input at any time, and buffers it until an application reads it. More than that, when the tty is in cooked mode, the kernel buffers whole lines at a time and provides some rudimentary line editing functionality that allow you to kill the entire buffered line (default binding Ctrl-u and backspace. During the time that the line is being entered and edited and until you press Enter, applications reading from the terminal read nothing at all.
The tty functionality in the kernel does not and can not know if and when an application like
tail is planning to produce output on the terminal, so it would not be able to somehow... cancel (?) line editing during such times and only during such times.
Anyway, being able to prepare the next line for the shell while something else is still busy running on the terminal and the shell is not yet ready to read that command is a feature, not a bug, so I wouldn't advocate removing it. Maybe not so useful for
tail (which will never terminate on its own), but pre-typing the next command during a long-running
make (for example), and even editing that command with Ctrl-h and Ctrl-u, all before the shell gets ahold of it, is a common thing to do. Timothy Martin wrote in a comment:
It is worth mentioning that
less +F somefile provides similar functionality to
tail -f somefile except that (accidentally) typed keystrokes will not
echo to the screen.
less not only prevents those characters from being echoed, but it also eats them, so they are not available to the next application that wants to read them!
Finally, there is one more reason:
In historical times (before my time!) terminals with local echo were common. That is, the terminal (usually in hardware) would echo the characters you typed locally while also sending them down the serial line. This is useful for giving the user quick feedback even if there was lots of latency over the conection to the UNIX system (think 300 baud modem dialing up a terminal server with auto-telnet to a slow UNIX system over a token ring network — or whatever).
If you have a terminal with local echo, then you want
stty -echo at all times on the UNIX server to which you are connected. The result is approximately the same as a terminak without local echo (the common kind today) and
stty echo enabled. So from that point of view,
stty echo's job is to echo charatcers immediately as soon as they are received, regardless of what software is running, in emulation of what would happen on a terminal with local echo.
(By the way, if you have a terminal with local echo, you can't hide your password.)