This could work if you are always forced to enter the full password to start a login session. The "PIN" password's hash could be generated at that point and held in protected memory (e.g. by a root process); it would go away on logout, as well as after some small number of failed attempts.
As to whether it's a good idea, that's debatable: if you want to solve the problem of being prompted for an admin password many times to perform tasks, a better answer might be to prompt once and get some sort of authorization ticket which allows the user to do a particular task without entering a password until the ticket expires.
