Hmm, I did not have this in mind when I wrote the proposal about Dm credits. However it seems a fair idea.
As pointed out, a DM has a fair chance for favotitism if he chooses to (his friend in the game plays a paladin? Whoops, how strange, there's a +X holy avenger in this crypt!). That said, I actually believe there is
less favoritism in LEW than a typical PbP game with your friends, as the game becomes less personal (and more persona-l

) when you don't have people in front of you physically.
I'd say a DM shouldn't interfere with an on-going game in this way for the most part, mostly because it may feel like "DM fiat". However, in between games or as a player to another player, I do not mind it. I would, however, ask for a rationale after each use of a DM credit (pretty much regardless of how it's used). For example, a player who is 47 XP short of a level might receive training in combat by another fighter-type PC (who spends a credit) and he gains a fighter level.
I believe the original proposal called for writing up a short note on how the DM credits are actually put in play, which hasn't been too obvious in the games I've seen where it has been used - though I may be mistaken.