I'll go ahead and ask, because it bothers me. Why is "telling everyone about it" bad?
It's bizarre to me that so many think simply using a title that one worked for and legitimately earned is bad etiquette (not to mention the catty PhDs-aren't-that-smart-anyway sniping later in the thread. Really? On an etiquette board?). I've seen this attitude come out just about any time PhDs, among other things, are mentioned. The consensus seems to be that we're* not allowed to even mention our accomplishments because that's "bragging" and people who haven't done the same might feel baaaad about themselves, and I don't understand the thought process behind that.
Telling everyone about it is bad, no matter what 'it' is...because it's bragging. To go around correcting the innocent mistakes of others in a haughty manner is also rude. When someone makes a huge deal about having a Ph.D., or insists on using the title in settings where it is by tradition not used, it conveys the impression of 'I am due greater respect and deference than you, you lowly peon.'
Personally, I agree with the Ph.D.s aren't that smart observation. In my doc program, it wasn't the smartest people who finished, or the stupidest ones who dropped out: it was, as the other poster said, more a matter of determination and persistence (barring family crises). Since then, working in academia, I've met people who had Ph.D.s and who didn't demonstrate much common sense, or quickness of wit. I've worked with lecturers who would have rated in the top 10% of the smartest people I've known- but who never attended a doc program. So when it comes to just knowing that someone has a Ph.D., that fact alone conveys relatively little information to me about how intelligent or knowledgeable they are. And yes, in my first job, I worked with a former department chair who had told the one and only Ph.D. in the department that he was not to use the title, because it made the chair look bad. (Actually, his actions pretty much conveyed that impression, but I digress).
Suppose a woman was going around correcting everyone that she was MRS. Smith, not Ms. Smith. Would you think, 'Well, marriage is hard work, she deserves to be respected for the work she's done' ? Or would you think that she was less than charming, and implying that single women were somehow inferior? Wouldn't your impression depend upon tone of voice and body posture, and the graciousness of the correction? It's the same for correcting a Mr. or Ms. into Dr.