I thought that this would be a problem also, but you can code a USERS
parm in the dsm.sys file and only allow certain users to invoke the
software.  So, if you know the password but aren't an authorized user,
the password is really useless.
Another thing you could do, which is kind of a haphazard fix, is place
the ADSM software in a deep subdirectory, (much like the AIX install
dir of /usr/lpp/adsm/bin).  What happens, I've found, is that the
command is too long for the 'grep dsmc' to pick up the password, that
usually occurs at the end.  So your password is not revealed.  Just a
couple of ideas....