All iPads Opening Smart Cover, way to not have keyboard pop up?

[miamialley]

Here is the answer to your question:

The Smart Cover actually activates two steps--wakes the iPad (like pushing a button on the iPhone, which shows the lock screen) AND slide to unlock (which if you do on the iPhone or Smart Cover-less iPad produces the password screen). Hence why you see the password screen when you open the Smart Cover.

The reason is likely because those who don't want to password lock their iPad may jump straight to the home screen upon opening the cover. It would be mighty annoying to have to swipe to unlock for those who don't want/need to lock their iPads and use a Smart Cover. The inconvenience of your situation (never getting to see your lock screen or turning off wake on open in favor of using touch ID like on the iPhone) is the lesser evil of the trade-off.

When more iPads have Touch ID they will remove the password prompt.