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I know that telnet is an insecure remote login application compared to ssh.

I turn on the telnet service on my VPS and succeed logging into it with telnet.

So telnet is for remote login, but how those "telnet BBS" work? It seems that I am viewing a web page instead logging as a system user.

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Telnet has always been a implementation of a remote terminal.

Login is the most well known usage, but in reality it can display or serve any special purpose.

Many people use(d) it for running remote applications, in banks and BBSs.

Due to security considerations, and the widespread use of graphical /Web interfaces, nowadays those usages are not as ubiquitous as they used to be.

As for the programs behind it in Unix environments, they interact with port 23 as their stdin/stdout, or have helper programs such as xinetd to talk using the telnet protocol on lieu of writing actual code for that.

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