I think some of the controversy associated with dyslexia arises because we are hanging onto a false concept - that of a single attribute, 'intelligence', which covers a multitude of different abilities. In my opinion, it's perfectly possible to have strengths in some intellectual areas and weaknesses in others. If intelligence was a single entity, your abilities in one area (eg spelling) would invariably be strongly correlated with your abilities in others (eg spatial sense, spotting patterns, long-term memory etc) - as far as I'm aware this is not the case. Where people are not good at reading/writing tasks, this typically gets labelled a dyslexia.
I do get the impression that people would rather be labelled 'dyslexic' rather than 'thick', irrespective of how specific their problems are to reading/writing. But I don't think people's desire to be labelled with a certain diagnosis should affect whether we acknowledge the existence of that condition.
Some 'dyslexic' people are definitely highly intelligent in other respects. Some aren't. I know some very bright people who are crap at spelling and cock up reading long words, and I also know some utter morons who can spell perfectly.
Dyslexia is a huge category and some practitioners will apply the term to a huge proportion of the population, whereas others are very strict. It might be more useful to have a detailed summary of strengths and weaknesses for each student, but realistically that sort of nuanced approach causes confusion with institutions which just need a quick and easy label to apply.