Username or EmailPassword
One specific incident where developers of a popular open source project cba'ed to step through the source code of another popular open source project demonstrates the fallacy of the meme.
On the other hand, the reasoning that "many eyeballs" makes code more secure while intuitive, AFAIK is not substantiated. The reason for this is because application programmers rarely have the skill set necessary to muck about with kernel internals. And vice versa.
However, if this incident causes the meme to be updated to something along the lines of "many eyeballs makes secure code, but with notable exceptions" I'd call that a vast improvement.