How to you do a one liner with sftp to login with the password on the same line

Since OpenSSH 5.4p1 I think, you can use the "-u" option, for example:

Subsystem sftp /usr/lib/openssh/sftp-server -u 022

From the man page:

 -u umask
         Sets an explicit umask(2) to be applied to newly-created files
         and directories, instead of the user's default mask.

In order to accomplish what you wish, you need to do two different things

1. Change sshd config to accept passwords

I shall say first of all that it's a bad idea to do this, I would rather generate a certificate for your user than activate passwords, nonetheless if you want to do so just edit /etc/ssh/sshd_config and change or uncomment it so it shows PasswordAuthentication yes. Once that is done restart sshd service ssh restart

2. Let users just FTP using sftp and not have shell

In order to acomplish that you need to install rsh (resticted shell) and change the user shell to it chsh username