That's the GPL, which only concerns itself with the distribution of (derivative) works. If you modify GPL'ed software for your own use, without distributing it, you can keep your modifications for yourself.
SaaS companies were (ab)using that bug by using GPL'ed software in their stack, but never distributing the code: they just rent out use of their machines to others. Therefore they don't need to distribute their own source code.*
The AGPL fixes that "bug" by including the SaaS "software on demand" in the definition of "distribution".
That's my understanding, as a layman AGPL fan. :)
*Where relevant. There are many scary stories about the overreach of the (A)GPL, but it's not always that bad. E.g. if you just use an AGPL'ed database, not embedded or linked but really like a DB with a separate connection, then your code is not under AGPL. Again, from my understanding as a layman.