Totally agree. If you'd like further proof that IQ isn't a measure of intelligence take a look at the Quora website. It's jam packed with people claiming to have monster IQs asking idiotic questions!

Personally, I think 'intelligence' is about being able to connect seemingly unrelated things to your benefit within your own environment. But it's about a balance. Too little of this and you won't be able to improvise solutions to novel situations, too much and you will be tipping over into insanity. Anyway, I don't see how it would be possible to measure such skills from a simple paper based test.