One of the benefits of poorly defined BBEGs is that the DM can play them in so many ways.
There is plenty of evidence to support playing the BS as an incompetent BBEG.
He's surrounded by incompetence and insubordination. Iarno gets a letter from the BS warning him about the party and what does Iarno do? Let's his Redbrands get drunk and gamble, stashes his bug-out bag with the most valuable (gp-wise) item in the module in an poorly defended location. His plan seems to be to totally disregard the BS orders and run at the first sign of trouble.
Grol does what the BS wants, but then tries to renegotiate the terms. Which most likely results in foiling the BS plans of killing Gundren.
The BS goes to wave echo looking for magic items and then overlooks at least two despite having at least a week to do nothing else. He is unable to take over the cavern because he's not powerful enough.
An alternative to trying to make the BS better is just play him like he is, maybe something similar to the Sheriff of Nottingham in Robin Hood Prince of Thieves.