Reportedly Boeing only used data from one of each plane's TWO angle-of-attack sensors to drive MCAS.
Does that strike anyone else as almost criminally incompetent?
Not really. Data from two sensors is not sufficient to determine a value. It can be sufficient to decide whether to use the information at all. That decision can be automated or manual (e.g. requiring the pilots to decide). In this case it wasn't automated. The fact that the indicator (AoA disagree) necessary for pilots to have the information was sold as an option is pretty terrible, though.
I'm imaging the cockpit's screen showing a "Your computer needs to restart to install an update" right when the pilot is preparing for landing now... Is that why they grounded the fleet?
No. They grounded it because for a large portion of the fleet, there was no indicator for pilots that would inform them of abnormal behavior by a safety critical sensor.