Why was ugly Judd Hirsch made out to be such a stud?

Back then it didn't matter. A lot of ugly/non leading man looking actors would get paired with the hot chick. In some cases the ugly guy has power and/or money or a charming personality etc

Taxi was trying to portray a world where people aren't so shallow.

It's like George Costanza dating attractive women every week on "Seinfeld". It's a sitcom, not a documentary about the romantic lives of homely guys. Besides, Hirsch had a sort of rugged, intelligent attractiveness. Compared to most male models, he was quite masculine looking and had something going on behind his eyes. Plus the character he played was smart, confident, and charismatic. The only thing that might have held him back with women, in real life, was being a taxi driver instead of having a large income. I'm not very good looking, myself, or rich, yet I had girlfriends far more attractive than me, and am still married to one of them. It happens.

Women were attracted to him because he was a nice, decent, kind, down-to-earth, sensitive guy, and not a complete goofball or jerk, like most of the other male characters.