Why would ordinary dividends in an IRA be taxed at all? The IRA is tax sheltered, I thought nothing was taxed until withdrawal?

You are correct.   Dividends earned within traditional IRAs are not taxed when they are paid or reinvested.   Rather, as part of an IRA's earnings, they're taxed at one's current income tax rate when they are withdrawn.

If you tell TurboTax of your IRA dividends, TurboTax will tax them.