For more advanced games this does lead to extremely long passwords, which is why the password system is pretty much extinct...
And, if anybody ends up caring about a game with passwords, they could easily just give out the passwords to anybody and everybody... Still, it's better than having to start over from the very beginning every time you open the program (which sure doesn't help with playtesting any).
In my most adventury adventure game as of yet, the values would generally be whether you have an item (or beat a boss) or not, which could be more complex. I suppose it would end up being, say, two characters, with each character combination indicating a different combination of max hp/items/bosses/cleared rooms/whatever.
Well, now I think we're getting somewhere. Thank you!