It's not so much incompetence as it is writing an engine for the consoles, then porting it to PC without rewriting the whole thing
Indeed. Games like Far Cry 2, Assassin's Creed, GRID and FEAR2 show that if you consider the PC properly as a platform then you can have a game that runs fine on both PC and console. They clearly didn't consider PC sensibilities when designing GTAIV, hence the poor performance and lack of basic features such as anti-aliasing. It seems strange, as every previous release has been done for PC as well... it's not like GTAIV was a surprise hit and they suddenly decided to port it.
Hitting "p" adds this to the PC release, but it honestly looks worse than the jaggies.
Yeah, it looks terrible.
"The price of freedom is eternal vigilance."