A few comments:

• mod/profile/icondirect.php bypasses the Elgg engine if simplecache is enabled.  That's the point of it.  If you're getting to line 73 simplecache is either off, messed up, or we have a bug that's preventing it from being used.  (Checked in 1.7.4 and it correctly bypasses the engine for me.)
• Oliver's original benchmarks were on Elgg 1.1 or so. Huge improvements were made in caching for Elgg 1.5.  On a fresh installation of 1.7.4b, loading the dashboard and all its resources has 54 queries.

Yeah, I think you're right. Long term, I'll work on caching and other scalable solutions. This was more of a quick fix to speed things up for now. But it is faster to implement than enabling caching for all the plugins that use pagehandlers for lightweight operations.

I couldn't get Compactor to work in 1.7.3. None of the plugin settings are recognized, so I think it's not being accessed. It does seem to be out of date from the current release so I'm not going to pursue it.

314 queries @ v.1.1 --> 54 @ v1.7.4b .....nice ;-)

Overall - maybe one should consider the old old saying -- if you to go faster - get a bigger higher powered engine (no pun intended). If too many queries -> just get a better more hardy linux box to house mysqld. Squid, APC, TurckMMcache, etc do improve overall performance. So I guess we can look for code level optimization (always a good idea) or "soup up" the server power.

Having said all that from both sides of the argument now - I'm still interested in looking at ways to optimize the code itself - as Brett's comment re: v1.7.4 demonstrates - cleaner, leaner, tighter code and etc etc that the Elgg Team has done to make 1.7.4 so much faster..