Take out the -u admin -P section if its running as root, as in running from a policy. The reason you're getting prompted for a password is because you're telling the command to use your local admin account to authenticate instead of root, but since the local admin doesn't have root access, you need to enter a password to authorize the change.
I use a managed pref for 10.6.8 users, (com.apple.mcxprinting RequireAdminToAddPrinters boolean false) For 10.7+ clients you can do it with a config profile (Printing payload) within the JSS. They worked well for me. Hope this helps
