I don't think all of this is necessarily crazy. It has gotten extremely competitive to get into good or great colleges. More and more kids are going to college, so the pool is more competitive.
Do I think you should study piano for 12 years to get into college? No, obviously not (I'm not sure that would help anyway). However, I don't have a problem if kids do things that interest them AND that might help them get in.
I do think it's important to look just beyond an IQ number. At some point, either for college or even in the work world, you will have to "produce" whatever product they are seeking- activities on your resume to get into college or doing whatever project you must do at your job. You can't go through life simply saying, "My IQ is 160" or "I am a DYS."