That's inexact. The WRT54GL was brought in as the (at the time) retail version of the WRT54G had much less RAM and flash because they switched from Linux to VXWORKS.
It's not that they didn't have the "security vulnerability" but they just weren't able to run Linux in a useful manner due to low hardware resources.
I also don't remember if the WRT54G became popular in the first place because of a security issue, I think it just enabled you to upload any firmware to it and that the original firmware eventually became open-source after they received GPL violation complaints. But my memory might be fuzzy, it was a while ago.
Basically the WRT54G with base firmware was better than anything else on the market at the time of release (within the same market segment - retail routers).
Just to put that into some perspective before the WRT54G, some of the functionality in the base firmware was being sold to small-medium businesses by companies like Cisco for thousands of dollars.
Word spread quickly and instead of your local coffee shop paying Cisco $20,000 to install their WiFi, they could spend $100 on a Linksys router. This meant companies could afford to give away WiFi for free because it cost them little or nothing to install the WiFi initially.
But what happened next is what turned the Linksys WRT54G from a "great" to a "legendary" product - people found out it ran on Linux. Now Linux is open source but more specifically it is under the GPL license.
What that meant is that legally Linksys were required to share the source code that made the WRT54G run. Which after some not-so-gentle prodding and legal threats they did.
People then made distro's (in the Linux sense) which updated the Linksys firmware to add new functionality, fix issues, and similar. This made the thing even more powerful than perhaps even Linksys wanted, and ate into Cisco's small-medium business space even more.
Word spread like wildfire and soon everyone and their brother owned a Linksys WRT54G. Linksys improved the base firmware only mildly while the third party firmware was steamrolling ahead.
Cisco eventually purchased Linksys and started cutting corners on all of their retail products. Using less powerful CPUs, less RAM, and stripping out functionality while not altering the cost. Linksys stagnated.
This was likely in no small part to try and get some of their small-medium customers back onto Cisco's books, but by then it was too late. The market that Linksys had created had spread to Linksys's competitors and soon everyone was "letting" their routers get firmware updates that turned a cheap little home router into something able to fend off medium-business level commercial equipment.
It's not that they didn't have the "security vulnerability" but they just weren't able to run Linux in a useful manner due to low hardware resources.
I also don't remember if the WRT54G became popular in the first place because of a security issue, I think it just enabled you to upload any firmware to it and that the original firmware eventually became open-source after they received GPL violation complaints. But my memory might be fuzzy, it was a while ago.