A user would want to give out her proper version reply, so they can be assisted in the event of a problem. For instance, with the recent DCC Bug in versions 6.00 through 6.11... IRC servers were able to alert (probably) millions of users in a single day when mIRC 6.12 was released to fix this problem.
Say for instance the DCC Bug was worse, and allowed attackers to launch executable code on your computer... IRC servers would deny connections from mIRC v6.00 through v6.11 for their own safety, and alert them of this bug. Users who are falsifying their versions would end up connecting and getting 0wned.
There is NO valid reason to hide your version reply, because attackers do not version before attacking. Attacks are too easy to blindly throw at users without needing to know their client.
- Raccoon
