A fundamental tenet of system security is that if the bad buys have physical access to your box, all bets are off. However, the problem with this particular bug is that it can also be exploited if you happen to have remote access via a serial console or lights out management (LOM) card which gives you access to the console at startup. It's quite common in enterprise environments for servers to have LOM cards, so the bug could be exploited via such a mechanism. However, LOM cards typically also provide the ability to mount remote media and manage the hardware of the system; in other words, it's almost as good as physical access to the box, and still way more than enough to compromise the system even if this bug didn't exist.
In short, the bug is definitely something that needs to be fixed, but the only practical way to exploit it by the bad guys would mean that they already have more than enough other (and better) ways to compromise the system that it really wouldn't matter.