Isn't this really saying that intelligent people exist at other Universities? I don't really think that anyone doubts this (even though I'm likely to argue that they show up in higher densities at Oxbridge as a consequence of admissions tests, STEP and interviews). There will be self-selection for Part III (being the traditional preparation for a PhD in the UK), so you're always going to get the strongest external applicants applying: although I did well, I found the Oxford MFoCS to be very tough even though I got a first in my BA. If I'd scraped it, I think I'd have really struggled and I can't imagine that Part III would be any easier, Cambridge let their own lot continue automatically with a 65. While I'm not saying that all Cambridge students are more intelligent than all Leeds students, say, and while I do believe that most UK Russell group BA degrees are broadly comparable, it does seem to be the case that Cambridge are offering a very more rigorous and intensive curriculum, even for Part I and II and this higher standard of education ends up being far better preparation for Part III. Evidence that this is the case for Oxford Physics, at least, can be found here:
http://www.physics.ox.ac.uk/teach/Exam_Reports/2010-2011/ExternalExaminersReports_Complete.pdf ... I'll also base this on the experience of my room-mate of two years who failed his first year at Cambridge, moved to Bristol and got a first. He's highly intelligent and pretty well motivated but just couldn't cope with the pace (I'm not really convinced that quickness are intelligence are so closely related).
That's true and it annoys the hell out of me. I often regret not taking the easy courses (mostly to be found in the form of a few suspect stats courses and two or three softer applied courses) and walking out with a stellar transcript (I knew a guy who learned numerical linear algebra in a week because he didn't understand Algebraic Geometry, he's now doing a DPhil...). Great pity that there isn't a way to compare between subjects and modules with any degree of fairness.
There's the part III essay (most PhD applicants will do it but it's usually expository instead of research) and the courses are very tough: not even Oxford do a course on Hodge Theory. It's pretty telling when you see the lecturer struggling: just to understand some of the stuff is hard and develops some pretty sophisticated thinking and, tbh, *most* people can't memorize by rote without developing the understanding. I completely agree with the points about excessive amount of bookwork though.
Distinction at Part III doesn't always make good mathematicians either. Miles Reid (FRS) barely passed Part III and there are countless senior wranglers who have never amounted to anything. Although most eminent UK mathematicians seem to be of COW lineage (with emphasis on the CO bit) there are always exceptions and even then, it's quite likely that this is a consequence of having big departments and for historical reasons. Caucher Birkar is one truly dazzling exception (by many accounts). It's very hard to predict who'll make a good mathematician; the best way is usually to see if they've done anything within 5 years of the PhD, if not they'll probably never do anything.