Although I agree with Nick and Jaron that there's a difference between what markets are good at, and what individual geniuses are good at, it's also possible, to an extent, to trade off design against selection.
From Darwin, we have the ultimate existence proof : enough massively-parallelized, dumb, selective pressure can give rise to something that would appear to require deity-level intelligence to have "created".
What's more interesting to me though, is that the internet gives us a laboratory to experiment with dozens of different ways of making the trade-off between generate and test. And between collective and individual intelligence.
We're continuously inventing new ways that the collective can be wired together. Each new network protocol, whether it's email or wikipedia or Digg votes etc. makes a different trade-off between richness of communication and breadth of participation. The richer it is, the more it can do the genuine "genius" stuff; but the more it relies on "intelligent design" from a core of smart people behind the scenes : ie. the wikipedia editors or the benign dictators of many free software projects.
At the other extreme you have things like PageRank or Technorati which use massively parallel, simplistic selection to great effect. Wikipedia is less dumb and collective than PageRank, but more so than Britanica. It's not an either / or thing, but a plurality of alternatives.
Some things are always going to require the "genius" mode. And Carr is right, that the loss of business models for some of these things means that they are going away.
I suspect that the collective will never write another "War and Peace". And nor will there be authors with the resources (or inclination) to do so.
OTOH, new opportunities are openning. The collective may very well *live* another War and Peace, in the context of an online role-playing game. Each player contributing a fraction of the time and intelligence needed.
I think what the 'genius' crowd is missing is that the hive, the community, amplifies rather then subsumes genius. The most brilliant poster on metafilter, the active polymaths on wikipedia, the best bloggers (as part of a community), etc. get amplified because of, not in spite of, the hive.