Joining a chorus, I'll point out that when using such a broad-brush term as "optimize", post-mature optimization (changing to an entirely different data structure two weeks before shipment because on real customer loads the project just doesn't freaking work at all) is at least as bad. Design, prototype, measure, lather, rinse, repeat. Waterfalls are for idiots in barrels.

Now, in particular (and relevant to the title), the reason optimization (and decent design) is still important in embedded systems is that the money for both software and hardware comes out of the same pocket. Often, for legal reasons or just customer expectations, so do support costs. The costs of bad coding are not pushed off to the customer, not "externalities". This can have a marvelous effect on code quality. (Unless, of course, your SVP was taken to a really nice resort by the salesdroids from a "turnkey development house", in which case both you and the shareholders are screwed... :-)