[PentaxPoke]

You may want to be a little more guarded in making such a sensational claim in your thread title before you understand the process you are criticizing. You should not have expected any different with the example you posted. You enlarged to 100% crop, a dark shadow region in the photo. That is always going to be the noisiest part of a digital image, even at 100 iso, and you were at 400.

Sharpening can be thought of as a "derivative process" In other words, it uses variations in light levels to highlight. If you sharpen something that has noise, then by default, the result will be noisier. Smoothing is exactly the opposite. It is an "integration process" where light variations are "averaged" in some respect to reduce noise.

The sharpening did exactly what it was supposed to do: it increased the local contrast of your image based on the variations in local light levels. You can't expect your camera to sharpen and smooth at the same time. If you want to be able to sharpen more while minimizing noise, you need more signal to noise ratio. In other words, more exposure (light). The problem is that if you upped the exposure of this photo, you would probably have blown out the clouds. Such are the compromises we have to make.

This particular shot is an example of where fill flash would have been helpful, but that is for another thread...