Right,

but do you see the problem with that?

Why would mIRC go through the trouble to md5 hash your password if it's being stored plaintext in your variables section?

Another script can just $read() your script files for $pdll() or /dll -p, grab the first argument, eval it and go. It's a pretty simple attack vector, not to mention you can target popular scripts that way without even a $read (you would already know what the varname was). If the goal is to block other people or scripts from running /dll (or /run) without knowing your password, doing this basically throws the security mechanism out the window with the entire purpose for inputting a password to begin with.