Nokia's phone naming strategy was certainly not dumb at the time. They built brand around 'Nokia', not around specific models. You had 'Nokia' phone regardless of the model, similarly as you currently have 'iPhone' regardless of the exact model. (And current iPhone numbering i.e. 2G, 3G, 4 is easy to remember just because there are so few models) It was an integral part of Nokia's strategy that there were many many models to choose from, any single strong model brand could have been hindrance for that strategy.
Now, we can argue that in smartphone era, building strong model brands might be wiser strategy (Galaxy S), but that's another discussion. Nokia's model naming strategy was definitely not stupid in earlier times.