When you open such a spreadsheet you get informed that it will become a "Numbers for iOS" spreadsheet and you can Open a Copy, or just Open it. If you choose to Open it, you have converted it to Numbers for iOS, and the password is permanently removed. If you choose to Open a Copy, only the copy is converted and has its password removed. When you are done viewing it, delete the Copy, and you will still have the password protected version in iCloud.
Unfortunately, it means that if you want to preserve the password, you only have read-only access to that file.