Because there isn't a semicolon in your $line:
$line =~ s/^\$mypic\[0\] = \"(\w{3})\"$/$1/g;
works.

That's one reason why I often use if() around my regexp stuff.
{NULE}

Update: Wow, two other people replied before I could type mine up. Aren't we a speedy crew? :)
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