The book is excellent, one of my favorite econ books, and is Smith's somewhat dense but well-written explanation for and interpretation of economics. His main thesis is that "rationality" is not a "constructivist" property of various agents, being possessed by any (or every) individual separately, but is an "ecological" property that emerges collectively from e.g. the price system, organization of firms and other economic relations.
His argument about profit-maximizing firms proceeds almost exactly along the lines of this tweetstorm, but goes further. Why would Wall Street want to reward companies that fail to be robust to changes? Are there other structural problems (the law? regulatory regime? bailouts? monopoly?) that cause CEOs and Wall Street actors to be collectively "irrational" as we are seeing today with JIT-everything?
IMHO, the problem is political-economic. Finance has arrived at this equilibrium of asset price insanity and phony accounting because the regulatory regime and state actions as a whole (e.g. bailouts) are entirely out of whack – the system has no working feedback mechanisms at the moment, so the economy is in a real sense failing. How did the state fail? Partly in response to demands from powerful & wealthy entities on e.g. Wall Street.