Yes, the server should never have the cleartext password. In this case the salted hash is the same as a password to you, but it protects users who reuse the same password across different sites. If your entire password DB gets leaked, the attacker would be able to login to your site as your users, but they wouldn't be able to login as those users to other sites without brute forcing all the hashes.

Edit: I guess the reverse is also true, that is, leaked user passwords from other sources can't be easily tested against your user accounts just by sending a bunch of HTTP requests to your server. The attacker would have to at least run the passwords through your particular salted hash scheme first (which they can get by reverse engineering your client, but it's extra labor and computation).