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You have to be able to strike these days and Royce was never any kind of striker. He was dominant back in the old days when nobody else knew BJJ but now he has no edge.
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The reason he was dominating in the early days was because his cousin organized the UFC and didn't invite any top fighters to come participate. The whole tournament was set up for him to win.
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There is WAY WAY more to this than people credit. The rise of BJJ as the definitive martial art form was a brilliant maneuver on the part of the Gracies. That they could be considered to have chosen the toughest opponents out there is pretty funny, but it's what passes for truth these days.
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This story has a couple bits of truth, but implies a malicious intent or an intent to stack the deck in some way. Ultimate Fighting Championship was certainly founded by the Gracies, but in no way were the first few UFC's rigged, or stacked in any way.
The Gracies started what they called the Gracie challenge back in the 1920's by Carlos Gracie (father of Carlson, co-founder of BJJ along with his three brothers primarily Helio). This was an open challenge to any fighter, to fight whatever Gracie that the family put forward in a Vale Tudo (Portuguese for "anything goes") fight. It was a great marketing tool and development tool for the burgeoning art of Brazilian Jiu-Jitsu. The Gracies won a whole lot more of these challenge fights than they lost. One of the premiere Gracie losses was to Masahiko Kimura - considered by many to be the greatest judo practicioner of all time - in 1951 (in which Helio had his arm broken to end the fight, by the shoulder lock which has come to be known in modern MMA terms as a Kimura). In this, Helio Gracie
In the early eighties, Rorion Gracie - one of the few 9th Degree Red & Black Belts in BJJ - formally took the Gracies BJJ to America to promote the style. Rorion updated the Gracie Challenge - openly offering to pay fighters $100,000 if they would beat the Gracie family's challenger (in this case, himself). When Royce turned 18, he joined Rorion in the states and began teaching alongside him.
The Ultimate Fighting Championship grew directly out of this Gracie Family Challenge. It was Rorion's idea, to start with, but several people were involved including Art Davie and producer Robert Meyrowitz.
The first UFC was started essentially as a more formal version of the Gracie Challenge as an open tournament. A significant amount of the $50k prize money was put forward by the Rorion and Art Davie (guaranteed, of course, the gate and the PPV revenues were used to recoupe that).
Absolutely anyone could apply, and there was not a lot of early interest. Anyone could already walk up and accept the Gracie Challenge and fight Rorion with $100k on the line. Invites and magazine articles went out to fill the UFC 1 roster, recruiting as many people as possible to help fill the eight spots. Saying that top martial artists weren't chosen is just crazy talk - Contenders eventually included shootfighting standout Ken Shamrock, kickboxing standout Patrick Smith, and Savate (French Boxing) world champion Gerard Gordeau.
Art Davie originally felt Rickson Gracie, Rorion's older brother and generally regarded as the best of the Gracie fighters, would be the one entered. However, the Gracies collecetively decided to enter their smallest fighter, Royce. They thought, correctly, that the less physically impressive Royce would make even more of an impact demonstrating BJJ to the world.
When UFC 1 (1993) and 2 (1994) hit PPV they caused pretty big sensations and larger than expected draws. The producers of the show, including Rorion, knew they had a hit on their hands, and what was originally envisioned as a stand alone tournament became a recurring event. the UFC evolved significantly between UFC 3-5 (judges, most fights with time limits) and very signifcantly by UFC 8 (combination strikers/wrestlers now ruling the land) and then took off from there.