Thanks for the help.
Just to update you, as it might apply to others.
The problem was in AdminTools. They have a parameter you can set to prevent creating new Admin users in the front-end (recommended ON), with references to day-1 Joomla security issues.
If enabled, it also prevents creating/emailing a new password for an Admin user. The user I was testing with was an Admin user.
In debugging the problem, I stumbled on the Admin Tools exception log, and it was all clear from there.
Thanks again.
