Maybe closed source organizations are more willing to accept slop code that is bad but can barely work versus open source which won’t?

Because most software is internal to the organisation (therefore closed by definition) and never gets compared or used outside that organisation: Yes, I think that when that software barely works, it is taken as good enough and there's no incentive to put more effort to improve it.

My past year (and more) of programming business-internal applications have been characterised by upper management imperatives to “use Generative AI, and we expect that to make you nerd faster” without any effort spent to figure out whether there is any net improvement in the result.

Certainly there's no effort spent to determine whether it's a net drain on our time and on the quality of the result. Which everyone on our teams can see is the case. But we are pressured to continue using it anyway.

Does business internal software need to be optimized?

Need to be optimised for what? (To optimise is always making trade-offs, reducing some property of the software in pursuit of some optimised ideal; what ideal are you referring to?)

And I'm not clear on how that question is related to the use of LLMs to generate code. Is there a connection you're drawing between those?

The Unix shell remains an excellent IDE.

A huge array of text- and data-manipulation tools, with more available through the standard package manager in my operating system.

Add in a powerful text editor like Vim or Emacs, and nothing can beat this IDE.