The original of this Microware OS-9 was my first exposure to a "unix like" operating system in the 80s. It was pretty amazing that a mutli-user, multitasking operating system kernel can fit in 8k.
I don't think that would have stopped people from actively using it as a multi-user system in its heyday. I think other systems used for multi-user computing at the same time often had similar security deficits (examples: MP/M, PICK, MUMPS, Alpha Microsystems AMOS)
Standards and expectations were a lot lower back then, and much greater reliance was placed on trusting users, and the obscurity of whatever security holes existed
Indeed. OS-9 on the CoCo is what I grew up on and it spoiled me for all mainstream systems later when I realized how inferior they were to what I got used to as a kid.
Multi-tasking multi-user OS on an 8 bit 6809 with 128K of RAM (and a price of just a few hundred dollars, back when an IBM PC was thousands).
It also made me feel very familiar when I first encountered various UNIX systems so the transition was easy.
Later there was OS-9 Level II on the CoCo3 which was much more usable as a daily driver OS.