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chmod 777 file change the permissions of the file file to read, write, and execute for all.

Ok, so the file can be manipulated in any way by any script on the server. But why is this not secure?

If you already have a script there, than the person who uploaded it has access to your server anyway... So what's the catch here?

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One reason is that it's easier to gain user access to a linux server than it is to gain root or the specific user that's allowed to access the script. If you set the permissions so anyone can access/modify/delete all important scripts, then you're removing a layer of security that user based permissions provide. If someone fumbles across a user account then they can take down your server. The best security is built in layers.

Maybe your question is based on how FTP accounts work. If you have a full ftp access account to a server, then you can do anything you want to the available files regardless of their permission. That's an insecurity in allowing full FTP access to a server.

This isn't limited to linux servers, just using them as an example.

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