That still needs a way to change users, and OpenSSH already has privilege separation. That hardens the process somewhat to reduce the amount of code running in the process which can change the uid for a session but fundamentally something needs permission to call setuid() or the equivalent.

Yes, but changing users is a function of the shell (or maybe more specifically /usr/bin/login), not the SSH daemon.

Yea, but then we’ve recreated this CVE which is caused by calling login(1) unsafely. The point was that the person I was replying to misunderstood the problem and largely seemed to be conflating telnetd with OpenSSH.

Congratulations, you've created a server that lets people have shells running as the user running telnetd.

You presumably want them to run as any (non root) user. The capability you need for that, to impersonate arbitrary (non-root) users on the system, is pretty damn close to being root.

Well obviously each user just needs to run their own telnet daemon, on their own port of course.

You still need to have privileges to become the userid of the user logging in. Openssh does do privsep, but you still need a privileged daemon.

I'm not sure that you need root because of the port - I think login itself needs to run as root, otherwise it cant login to anything other than the account its running under.