If the FAI would make Stalin as intelligent and well-informed as the FAI, then this newly created entity wouldn't be Stalin anymore. In fact, it would be something totally different.

Yeah, so? Nobody said the intelligently extrapolated volition of Stalin would be Stalin. It would be a parameter in the calculation parameters of the FAI.

But maybe I'm just too stupid and there is some continuity of identity going on.

We're not talking about simulating people. We're talking about extrapolating their volition. Continuity of identity has nothing to do with anything.

To put it bluntly: Many folks seem to me either utterly stupid or evil or both.If the FAI makes them "as intelligent and well-informed as the FAI itself" then they would be different people.

Which is the exact point, that we don't want the current volition of people (since people are currently stupid), we want their extrapolated volition, what they would choose if they were much more intelligent than they currently are.