Yes, and it was AWESOME! I never used it as a replacement for bash (no readline support), but a lot of shell scripts were much easier to write and to read in Scheme: full support for mathematical expression, elegant iteration, support for lists, etc., and this very well integrated with shell constructs like pipes and redirections.
I used it a lot and saved me lots of headhaches. It's a pity that the project was abandoned.
scsh was definitely awesome, and it's not really practical in Common Lisp[0], due to Lisp's unfortunate choice to upcase all symbols. Made sense at the time, but in retrospect I think it was a mistake.
It's a real pity that Franz's modern mode[1] didn't become more popular.
[0]: it's possible, just ugly as hell because either one would have stuff like (|ls| |etc|) or one would have stuff like (|LENGTH| …).
In fact you can have case-sensitive Common Lisp packages that are completely backwards compatible with case-insensitive CL code by settings readtable-case to :invert[1], and this works without any problems for interfacing with external case-sensitive environments.[2] Allegro's modern mode is what you would get if you assume case sensitivity as a default, but portable Common Lisp can handle case sensitivity perfectly fine without breaking backwards compatibility.
Yeah, as others are saying, the CL spec foresees this with the way readtables work. But, honestly, the default behavior is pretty nice for normal programming tasks.
Yes. As a bonus, the acknowledgements in the scsh manual also features some of the finest writing I've ever read in a technical document: https://scsh.net/docu/html/man.html
If you haven't already, I recommend checking out rlwrap, which you can use to run any ol' program that takes input on stdin and give it readline support. I use it quite a lot, and I have aliases in my .bashrc for wrapping various interpreters (like tclsh, sbcl, ocaml, and my own interpreters), but you can even use it to wrap /bin/cat and have a rudimentary line editor ;)
My cousin's a core contrib on [xonsh](https://xonsh.org) which is a posix-compliant python shell. I remember him cackling about making his env completely unusable to anyone else in the world (while giving himself amazing powers)...