So we take away from this that their command parser was a quick and dirty hack.
I wouldn't say that it was a quick and dirty hack. It just wasn't very a very forward thinking API.
The fact that the "/" character conflicted with the path character of another relatively popular operating system wasn't particularly relevant to the original developers - after all, DOS didn't support directories, just files in a single root directory.
Then along came DOS 2.0. DOS 2.0 was tied to the PC/XT, whose major feature was a 10M hard disk. IBM asked the Microsoft to add support for hard disks, and the MS-DOS developers took this as an opportunity to add support for modern file APIs - they added a whole series of handle based APIs to the system (DOS 1.0 relied on an application controlled structure called an FCB). They also had to add support for hierarchical paths.
Let's be honest though, a lot of technology comes down to solutions that work for the moment, and while I'm not a huge fan of Microsoft, I can hardly hang that albatross solely on their neck. Every developer has at least a slight stench of fowl hanging around them most of the time. Come, let me tell you the rime of the ancient code mariner.