Technically I suppose you are right, but pragmatically they did.
My mom grew up in an oystering community, and I spent many happy childhood hours there. My uncle still has an oyster shell lane! - although they are no longer made since industrialization and PCBs destroyed the oyster fishery.
Believe me, the fresh shells stink! Nobody’s found a way for watermen to remove the animal from the shell without leaving some shreds of meat in there, not to mention juices. I suppose such tasks could be automated to avoid stink, leaving tens of thousands of hard workers without jobs, but that seems counterproductive to me.
And no, it’s not normal to bury them, at least where Mom is from. Many shell middens on the East Coast are thousands of years old, they were begun by Native Americans. When I was a kid they were taller than many local buildings, but since the fishery died those heaps have dwindled away as the shells have been used up. They are a bulk commodity resource, for paving and many other uses, not just trash.
Incidentally, some shells are incinerated - but only when there is a use for the fired minerals, because burning them just to get rid of them would drive up the cost of shellfish and make people buy imported ones instead, again putting people out of work locally.
If you want to smell something that makes a shell midden seem relatively mild, visit a town with an old-fashioned paper mill!
If you take out the “improperly” I’ll agree 100%! Repair, Reduce, Recycle, Reuse… the stinks will pass in the fullness of time.