In fact, in many countries (such as the European Union), it’s downright illegal to do what you are suggesting you need to do.
No it's not, not even in the slightest.
Who’s leading the push for the encryption? Who’s leading the push for the report? Is it the same person or different people?
That's none of your business.
What is the business reason for undoing that security measure to expose those passwords in clear text?
We can already see the passwords in clear text via our front-end application, they are just encrypted in the back-end. We have very solid permissions and privileges in our front-end which means only members of IT (of which there are only 3 of us) can see the table. The only reason I am floating the idea of having them in a report is because our front-end does not allow us to search or filter the info whereas I would be able to do that in an SSRS report. Again, I would make sure only members of IT can see the report.
I only asked the question on here to see if it could technically be done, I did not ask for your opinion on the inner workings of my company.