"Of course, just because you presume intelligence doesn't mean that every decision made was smart."
I'd rephrase as follows: it's unwise to assume stupidity on the part of your competition, but it's very wise to allow the possibility of stupidity.
With the corollary that if there's an inexpensive way to capitalise on that stupidity if it exists, it's probably worth trying, just in case the thing that's walking like a duck and quacking like a duck is in fact a duck.
As a tangent to that - the chances that assumptions of stupidity are correct go up in direct proportion to your level of domain knowledge.
I see a lot of non-film people say "the movie industry does $FOO and that's really stupid", for example, and 95% of the time, they're wrong and there are good reasons for doing $FOO.
However, I also see people who know the film world (including me) say "a lot of / most filmmakers do $BAR and it's dumb" - and $BAR has a considerably higher chance of actually being a dumb, common mistake.