Is it OK to use a hot plate?

Alton Brown gimmicked up a smoke rig on one of his shows utilizing a hot plate coil. You should be able to find information on that on FOODTV.com.

I, too, would worry though about concentrating that much heat inside an insulated unit such as Masterbuilt.

Alton's was pretty UN-insulated as I recall. Clay pots and such.

I might consider taking the $100 and trading up to something more reliable. Just my 2 cents.

You have two major issues with this route:

1) Temp control. You're using it as a heat source, so you'll check on how you can use it to control the temp. Typically they have a dial you turn it on, but it has zero knowledge of the temp

2) Wood. Separate to the above, the heat plate will have to burn the wood, but if you've turned it down to control the temp, you won't be burning any wood (you might use chips or pellets, they burn at lower temps)

Personally, I say dump it and get an ECB (el cheapo brinkman) you can get them for less than the $100 you mention (although I'd say spend more and get a Weber bullet) and use charcoal lump and learn that method, if you're not wanting to spend money on a CS or other smoker.