I haven't read the paper yet, but from all the other material I've seen from the SI, an important part of the "intelligence explosion" hypothesis is the establishment of a stable goal/utility function. This is qualitatively unlike what we have now, which is a system of agents competing and trading with each other.
An "intelligence explosion" refers to explosive increases in intelligence. What you are talking about sounds as though it has more to do with the social structure in which agents are embedded.
Do you deny that intelligence has increased recently? What about computers and calculators? What about collective intelligence? What about education? What about the evolution of human beings from chimp-like creatures.
Intelligence on the planet is exploding (in the sense of undergoing exponential growth) already, and has been for a long time - check with...
Anna Salamon and I have finished a draft of "Intelligence Explosion: Evidence and Import", under peer review for The Singularity Hypothesis: A Scientific and Philosophical Assessment (forthcoming from Springer).
Your comments are most welcome.
Edit: As of 3/31/2012, the link above now points to a preprint.