The Internet of Things (IoT) has become indispensable to our daily lives and work. Unfortunately, developers often reuse software libraries in the IoT firmware, leading to a major security concern. If vulnerabilities or insecure versions of these libraries go unpatched, a massive number of IoT devices can be impacted. In this paper, we propose the AutoFirm, an automated tool for detecting reused libraries in IoT firmware at a large scale. Specifically, AutoFirm leverages the syntax information (library name and version) to determine whether IoT firmware reuses the libraries. We conduct a large-scale empirical study of reused libraries of IoT firmware, investigating more than 6,900+ firmware and 2,700+ distinct vulnerabilities affecting 11,300+ vulnerable versions from 349 open-source software libraries. Leveraging this diverse information set, we conduct a qualitative assessment of vulnerable library versions to understand security gaps and the misplaced trust of libraries in IoT firmware. Our research reveals that: manufacturers neglected to update outdated libraries for IoT firmware in 67.3\% of cases; on average, outdated libraries persisted for over 1.34 years prior to remediation; vulnerabilities of software libraries have posed server threats to widespread IoT devices.