They did lexical scoping "right", no doubt. But back when
Landin first found that lambda calculus was useful for
modeling programming languages these concepts were not clearly
understood.  I do not recall reading anything about whether
Algol designers not allowing full lexical scopin was due to an
oversight or realizing that efficient implementation of
functional argument was not possible. May be Algol's call by
name was deemed sufficient? At any rate Algol's not having
full lexical scoping does not mean one can simply reject the
idea of being influenced by it. Often at the start there is
lots of fumbling before people get it right. May be someone
should ask Steele?