What is this dichotomy of theory and problem solving? Although I do agree that there are differences between the two, they are not on opposite sides of some scale. I think it's insulting to problem solving to say that VCE is biased towards it since VCE mostly consists of exercises rather than real, nice problems. Wrestling with a problem forces you to be creative and hence look out for things when doing theory, rather than just doing theory by sticking to strict definitions and deducing things from axioms and definitions that have probably been formulated by the real creator who only introduced it after he solved the more complex aspects. Hence an unnatural view of the subject. Although sometimes the problems too are contrived in such a way that the trick/answer was invented and hidden before the problem was formulated.
Of course this all boils down to what kind of problem solving is being compared to what kind of theory learning, so I can agree with both views depending on the situation. However it's good to learn some problem solving without being hardcore IMO-competitive, just to get the mind working and be more alert and creative with theory. Simpy, I don't like how some people are filled with dry theory but not real, natural mathematicians in soul.
Heh. Without realising it, you're very biased towards the problem-solving side; many mathematicians would still consider people filled with dry theory to be "real, natural mathematicians in soul." There's a massive difference between the mathematical careers of, say, Erdos vs. Grothendieck - the former motivated completely by solving problems, the latter completely by abstraction and creating new areas of mathematics. I don't think many in the mathematical community would say that one is more or less of a mathematician than the other though, but there definitely is a divide between those who tackle certain problems and those who work more generally in extending a field of mathematics (e.g. those who try to solve the Riemann hypothesis compared to those who generalise the notion of the prime number theorem to number fields and conjecture a similar hypothesis for that case).
Of course, it is possible to do both at once - Perelman is famous for solving a difficult problem (the Poincaré conjecture), but in doing so he unearthed an important new area of mathematics, by defining the Perelman flow on a Riemannian manifold. It's certainly the case that new theorems, definitions, and ideas can be unearthed when trying to solve a problem; in fact, it's quite unusual for a paper detailing the proof of some result not to contain some nontrivial, abstract theorems along the way. Similarly, many new theorems, or indeed new areas of mathematics, arise through a mathematician motivated by, or trying to generalise, a particular problem.
Though I don't think it's insulting to say that VCE maths is biased towards problem-solving. In any case, the only "difference" between exercises and problems is the labelling - exercises may be simple because the path to solve them seems clearly laid out, but that's just personal perception. It just depends on how quickly you're able to make the leap from a problem to its solution.