There's a tiny little bug in Quake3 that can make an invalid GL call at times: it "worked" for 7 years because the drivers gracefully ignored it, then suddenly started to cause *massive* slowdowns on nvidia cards (from 400+ fps to 100). Technically, it's id's "fault", but it's pretty hard to blame them for it - or to blame nvidia for the drivers going into Sulk Mode, since it IS an invalid call.
I totally agree with your post, but I have to play devil's advocate for a bit here: if they detect Quake3 and work around the bug this way, someone will post a story about how NVIDIA cheating in Q3 benchmarks, because if you rename quake.exe to quack.exe the FPS drops from 400 to 100. So either way, they can't win - someone will always complain. I used to write D3D and OGL drivers for a living (not for ATI or NVIDIA, no threats please!), so I'm all too familiar with these issues...
In this case, Q3 is fairly old (wow, 10 years!), and it is likely some other (more mainstream) game required a fix to be applied that happened to slow down Q3. If you *had* to pick a side, as a company, which one would you choose?
I think NVIDIA did the right thing, even if it "broke" Q3. If there is still a market for Q3, id will release a patch. Hell, anyone could fix it, id released the source for the entire game...