Not necessarily. It will just discourage the n00bs who don't do any effort to read readmes before using softwares. This utility isn't as useful anymore with forums around, but back in 2004-06 you have no idea how many emails I got about Zelda DLQ asking me how to install the game on their calc. That program Yeong linked to is meant to force people to read the readme, since the password in question is in the install instructions.
Also it only asks the password once anyway. IMHO if someone doesn't want to spend any effort reading the readme that explains the install instructions for a program and readme I spent hours on, then they do not deserve to play that game. I'Ll only help if the person said he followed instructions but it doesn't work. Heck, I even received e-mails from people who did not even specify the game name when asking help.