Your thunderbird, as a mail client, is simply making a request. The server is ultimately responsible for security and access control.
I'm wondering, though, if Thunderbird is using the correct password. Did you have the correct password entered originally? Is Thunderbird set to remember passwords? Check your Thunderbird settings to see what password it has saved (under options, "View Saved passwords" button).
If Thunderbird is, in fact, using the password you provide (which you know happens to be wrong), then I would think your ISPs server is at fault, and is not enforcing authentication, or is improperly authenticating users. In this instance, you may want to contact your ISP and see what they can do to fix the problem.