Bitplayer,

You are correct in saying that there is a lot of stupid money in the Derby and that in itself adds some value to intelligent picks. The problem is that the frequency of bad trips of even the best choices, often makes the race so unpredicatable as to cancel out this advantage. I think that the high prices one see's for Derby winners are more a relection of unpredictability than they are of value. I find many Derby-specific strategies just one step above strategies for winning the lottery. Though my overall Derby R.O.I. is about as good as most other races I play (probably for the reasons you state), I'm still leary of making it a prime bet. The one thing I hate the most is when I lose with a good selection due to a bad trip. This happens more often in the Derby than any other race. If I lose because of a handicapping error, I can at least learn something from the experience.
Of course, people should base their betting stratigies on what they're comfortable with and the last thing I want to do is tell people how heavily to bet the Derby. I just personally find it useful to realize that this race is often a minefield and bet accordingly.

Bob