If you switch the HDD for a pair of SDD (one storage, one swap), it would be somewhat useable. Better to increase the amount of RAM if possible. If I remember correctly, 2-4 GB of RAM was not uncommon at this time period. Although NixOS or a really light Debian install might be able to stay within that amount of RAM. So yea, I think it's feasible.
Good Idea? Perhaps not so much. That proc has a TDP of 95W. Haven't found anything on it's idle power draw, but I'd guess that that system would have a fairly heavy power draw. The slow speed of the processor and low amount of RAM would probably limit the amount of traffic you could put through it. Additionally, the age of the components would probably cause reliability issues.
Generally I like to tell folks to use what they have. Repurposing old hardware is better for the environment and usually the wallet, but this system would probably would not be my first, second or even third choice for any workload. I haven't found a benchmark comparing the two, but I think a Pi3 would probably run dead even with this system at a far lower power draw. Although the Pi3's ethernet does run on it's USB bus (I think), along with it's storage, so that would slow it down for this workload. If you wanted to run traffic faster, I would probably look into the used micro PC market at the $75-$150 USD price point. This system is old enough to vote. Something merely 10 years old would be considerably faster.