1. The shell is not calling functions, it is composing filters via I/O. Superficially similar, but actually quite different. (And how it makes it superficially look like function application is also quite interesting, IMHO).

2. But yes, programs that act like functions definitely do exist. They even used to be in the majority.

3. ALGOL stands for ALGOrithmic Language. It's a DSL for the domain of algorithms. As are virtually all our mainstream so-called "general purpose" languages.