Do you think he would commute to work in a Ferrari?
If he wants to use any of the things you've listed, there's no reason he can't do that on his linksys router; enabling SSH is trivial on every model they've ever released (they do this intentionally). The only advantage to having a powerful machine instead of a dinky home router is the capacity of traffic that it can handle, and it is already unlikely that he will meet the limits of the dinky home router.
The difference between buying a cheap Linux WRT54G and an old PC or embedded board is that the latter two are expansible and you largely have control of whats under the hood. What if you want to beef up your WRT54G with the newest Ethernet and or WiFi technology a couple years from now? You're out of luck. These home-grade routers are disposable. You're also largely limited what you can run on WRT54G ... Linux and NetBSD. At least with a board like Intel Atom, you not only get an x86 processor, you get a beefy 1.6GHz processor for about the same price as WRT54G!
I also think Linux is dangerous to use as a router unless you keep a sharp eye on Linux security community. Security on home routers is a serious issue, I kid you not! We're talking about risking your identity, your bank/credit card account numbers, and also bot nets (which can commit serious crimes in your name!). ISPs like Comcast will also restrict your Internet usage if it finds your computer is compromised. Comcast in particular will not help you diagnose and fix your problem. Removing these limitations is also near impossible - for me, it took a complaint to the FCC to receive a call from a head network admin at Comcast to remove the SMTP port block! You don't play games when it comes to security...using the disposable home-grade routers is dangerous because the hardware and software they use are often proprietary! You trust the manufacturer (which are NEVER Linksys, D-Link, Netgear!) to audit their products and to issue patches. Linux is probably far worse and boy you are really asking for it when you opt to use a Linux distributions that is not designed to be hardened (e.g. You DO NOT use Ubuntu as a router!).
With regards to Linux, your only line of defense is to compile a kernel that disables loadable kernel modules. That's it! There are no mechanisms to combat rootkits, no mechanisms to make the system immutable (e.g. kernel denies access to /dev/mem, /dev/kmem, /dev/io and other sensitive devices, as well as protects crucial userland tools and libraries from modification), and no mechanisms to enforce immutability of firewall rules. You are literally asking for it by using Linux! Don't take my word for it, check Linux's security track record. My department's Linux servers have been hacked many times in the past. I mean, the fact that most Linux distributions don't even have a notion of a wheel group is already quite frightening.
