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Well I doubt we'll ever hear it from someone who was there, so we can only speculate. My guess is they knew water spraying off the rear tire gets directed at the slit at the seatpost pinchbolt, and that slit is usually not sealed against water getting in. So they though "merde, can't let road grit slurry get into the bottom bracket bearing, let's cork it." A great idea until those frames start dying from rust perforation at the top of the cork from constantly having a little puddle there.

The cork might still be considered a great idea if everyone knew to take their post out, turn the bike upside down and drain the water out now and then. You'd want to give it time to dry out inside, maybe with help from a heat gun or blow dryer. Using and periodically replenishing some kind of anti-rust goop (Framesaver™ or some such) would also help. This scenario might actually be the best plan, as long as we really remember to do it. Or if everyone lived in Arizona.

In this world, where people don't always remember to do their periodic maintenance (and some of us live in Seattle), a more fool-proof plan is to make a hole in the bottom of the frame, to let the water out continuously. Lowest point while the bike is horizontal, right under the bottom bracket.

Even that can fail though. My wife's superlight steel roadrace frame rusted through the left chainstay at the dropout. We live in Seattle and she often rode her light race bike in the rain without fenders, even though she had a perfectly good fender bike. But sometimes you just want to ride the fast bike, right? And you might get caught in the rain though it was nice when you left. This bike got ridden hard and put away wet so often that there was a chronic puddle at the dropout end of the chainstays, because she always hung the bike by the front wheel as soon as she got home. I guess the right chainstay might have been rusted too, didn't saw thru it to find out, but the left one perforated. So, if I'd known all that, I could have made weep holes in the chainstays near the dropout, and the bike might have lived a longer life. But it went about 20 years, which is longer than some people thought that bike would last. It was made with the lightest tubes I could find, .6/.3 mm Prestige main triangle, some Columbus and some Excell, and weighed a bit under 2.5 pounds. The fork was (is) a bit under 1 pound. Those numbers are pretty light for steel, but I still believe it could have lasted much longer (like essentially forever) if not for the rust.

So the frame on her fast bike now is Ti. Problem solved?