IIM CAT and case studies are justified for weeding out 'analysis paralysis' etc

The online CAT fiasco in my attempt(Nov'09) had drawn adverse comment and analysis about the validity of such standardized tests in assessing potential managerial ability. While the conventional answer would be TINA(There is no alternative) argument in weeding out lakhs of potential applicants, there is more to it. Consider what does a test like CAT(with sectional cutoffs) do?

1. It tests the ability of a candidate to turn in a balanced performance(sectional scores) using his limited resources(time) to the maximum. This ability is not dependent on the test content. That it evaluates analytical ability, verbal reasoning and quantitative ability is a bonus. These skills are not an exhaustive set of skills needed for MBA, but are virtually the only skills amenable to standardized testing. Also, these skills usually suffice for case study analysis
2. At IIMs(and most other top Bschools), the Harvard case study pattern is followed where students must prepare cases in their study groups. Typically, there are 2-3 cases/day all with exhibits and analysis to be done. The rationale for case studies is that they expose students to real life situations(and help learn from past mistakes/hits), encourage them to take the inter disciplinary decision maker approach and take decisions under ambiguity/incomplete information. Some argue that candidates with work experience are exposed to real life situations and can read books to learn from past hits/flips. 
3. Few graduates(if any) get a chance to work in an inter disciplinary role, so case studies add real value here. One may argue that this trains MBA to be overconfident and give their opinions/sound bytes on things they are least equipped to discuss. But this is just the 'specialist versus generalist' argument in a new content. 
4. My view is that case study approach does not promote short termism. Professors expect(and get) rigorous analysis. Also, most cases emphasize the importance of taking the bigger picture/long term view also considering non financial factors. In fact, the case approach compells the student to make up his mind under uncertainty and avoid analysis paralysis. This is true even for CAT where students cannot linger over a problem too long(leave that to R&D candidates!). To my mind, taking reasoned decisions in a short time, under constraints of information, is the hallmark of a manager, and both CAT/case study approach inculcates that in ample measure.