Sortakindamaybe. iOS sandbox restrictions might render it impractical on that platform (I've never looked into whether or not Apple allows for that sort of thing. I suspect they don't.)
This could be the right way to handle it, or it could be thoroughly useless. If this password is being given to Social Suite folks in advance and they're sharing via Twitter or something, it's useful. If it's being given at the time and other folks are getting it by being told face-to-face, or being texted, or by sneaking in and reading it from documentation there, this would accomplish nothing.
There are people who pay good money for things like that.
Do they keep the same password for multiple games? If so, then that's an obvious and quick workaround - change the Wifi password for each game.
The maybe-overkill solution would be to have one username/password per person in the Suite set up, and a maximum of two or maybe three concurrent logins for each such username/password - that way someone who does give out a login does a limited amount of damage and yet folks who use, say, a laptop and an iPad side-by-side don't get screwed over. But that implies a lot of obvious administrative overhead in terms of assigning those usernames and passwords.
Personally, I just use my cellular plan.
Never have had any troubles.