Solid fuel motors aren't unknown for upper stage use (e.g IUS, Star-48, among others).
While solids generally have the drawbacks of poor Isp and controllability, their simplicity keeps cost and stage dry mass down on small upper stages. Note that in early launchers such as Vanguard, the specific impulse of the solid stage wasn't much less than that of the liquid stages (248, 271, and 230 seconds respectively for the three stages); there likely weren't any very small, efficient liquid engines available for the third stage role.
Control of orbital insertion, also, wasn't that critical for the Vanguard series; the satellites were launched into fairly high, elliptical orbits, and it was challenging enough to get them up at all without worrying about their exact trajectories.