I agree that the main problem wasn't the options, but I do think that some of options are were unnecessary (the distinction between hibernate and sleep, for instance).

The real lesson is that design by comittee over years trying to reach a compromise will often result in terrible design decisions. It wouldn't even have been a problem if they had kept the icon, if it just did what people expected it to! (shutdown, not sleep as was the default). And now we have Windows 8, where they've hidden the shutdown menu inside Settings.