Heh, you'd be surprised at how many businesses cling to crippling tools because management has made their decision and refuses to abandon it. Moreso with languages than with editors, though I know of companies that standardize on a toolset (often one that's not top-notch, though I don't know of any that would mandate something as ridiculous as Notepad) and refuse to let you use anything other than that. Sometimes customers mandate certain technology choices too - I know of one government-sponsored project where they had to use Java/EJB even though virtually every engineer in the company thought it was a terrible choice.
Many of the projects I've worked on have succeeded in spite of lousy tools, insane deadlines and other various hardships. Those experiences were the genesis of my personal philosophy that good people get the job done one way or another. Luckily the people I've worked with have all been pretty smart!
