Yes, this is what we should encourage kids to do. It is both more interesting/meaningful and more effective than test prep per se, because it better accords with how human brains store and process information. The skills learned are also dramatically more transferrable to other tasks/activities, and much more valuable to society.
Test prep is a pathetic substitute for actually learning things.
It doesn’t take a special kind of person to learn and do things for their own sake. Every child naturally behaves this way. It just takes a society/culture that values humanity and learning not to smash those kids’ basic curiosity by the time they get to high school age.
I agree with you that this sort of mission of self-actualization for kids is a laudable goal. I personally hated school and spent 12-18 blowing off boring coursework to indulge my curiosity with computers. In that ideal world, I'd say it's a tossup between whether reading/math or exploratory hobbies are more important (probably depends on the person). But in the world we live in, where kids are burdened with the reality of practical concerns, especially the ones for whom college is supposed to be their ticket to social advancement — in other words, in the world where it's a given that kids are going to be doing meaningless hoop-jumping — the SAT tends to be, I think, a much more reasonable hoop to jump through than faking extracurriculars and "holistic" merit. Like 'rayiner says, a summer of studying, versus four years of starting fake clubs, doing various competitions, trips to third world countries, volunteer work, collecting awards across various hobbies, and whatever else is on the checklist now (these were the things in my day).
Activities like music/debate/programming/sport contests, tutoring younger kids, performing science experiments, hacking on computers, getting short stories published, working a part-time job, working for a political campaign, or whatever else have some intrinsic value/interest and are not just meaningless busywork for many (most?) of their participants.
In my experience the kids who pick one or two things they find personally interesting and pursue those out of real excitement end up significantly more successful in the admissions "game" than the kids who spend every waking moment trying to play it as a game per se. While also having a better time. And this is not because they are any inherently smarter or more motivated or whatever.
Rayiner almost always comes across to me as a cynic whose main goal is running up his family’s score in the money-earning game and who looks down on anyone with humanistic goals as merely an unsuccessful fellow cynic. Maybe that’s unfair, but that’s my persistent impression comment after comment, year after year. YMMV.