Personally I do think VCE results do give a sketchy idea of how intelligent someone is.
i.e. To me say someone who is good at maths will have a higher chance of getting a better study score than someone who isn't.
If you really want to see someone's intelligence compare the VCE results and university results of a student and then you will get a better idea of how intelligent they are.
As what other people say, if someone has access to more resources than another person the person with more resources will have a better chance of doing better. One thing is that the resources allows the student to understand what is expected from them in an exam, etc. Also people who have more stress in their life than others, this factor will come into play with determining how they will perform in VCE.
I have gone through the whole VCE system and I will say that it will be detrimental to some and really be great for others. We don't like a number being put next to our name (one that is lower than say your friend that is), because our sense of worth we feel is reflected by this. People who put in more work than the other person who will seem to breeze through what you are doing, makes you feel as though you must be doing something wrong as you invest all this time to achieve less than the person who breezes through the content (been here).
I got an ENTER that I felt was good but not overly that good. Additionally it was a score that was lower than some of my friends which was the real problem. Overall the game of VCE is not a fun thing, it leaves many people feeling inadequate, many people without a means of studying what they truly want (Thank god I got into what I really wanted to do that in itself is a real achievement) after year 12. Year 12 itself was a great year in itself but the VCE component is not nice to people.
I will finish with what a friend of mine at uni said (yes we still do have the odd chat about our experience of VCE):
"Someone who got an 86 and needed only 85 to do science (their first preference), has achieved more than someone who achieved 99.00 when they needed 99.10 for medicine (their first preference)".
Those scores aren't accurate they are just intended to give an example. I guess that at the end of the day it a good feeling to know that you have the privilege to study what you truly want to do. Succeed in what you want to do and you have truly achieved more than the guy with 99+.