A sufficiently smart rogue general AI will indeed understand that it is doing wrong, harmful, senseless things. It just won't care.
>But if it continues to work on the paper clips and decides that they are still needed even after people are gone - how is that super intelligent?
That is the correct action if all it cares about is making paperclips. Creating paperclips satisfies its utility function. Fretting over the existential issues of creating paperclips long after the last piece of stationary was destroyed would be judged of negative utility.
If it doesn't, then... well... like I said elsewhere in the thread... put that on your list of potential depressing answers to the Fermi paradox.
In my opinion one can't talk about a super intelligent being and not allow that being to be able to reason and understand it's place in the world.
If it's no more contemplative than a human, it's probably no more intelligent than a human. If it's no more intelligent than a human then it's not going to take over the world and fill it with paperclips.
Something capable of conquering the world or otherwise totally remaking reality in its image would by definition be something of vastly superior intelligence to ours. I find it hard to believe that this being wouldn't also be superior at self-reflection, since the two seem at least related.
If intelligence and self-awareness are unrelated phenomena, we have bigger problems. You could put that on a list of possible very depressing answers to the Fermi paradox: "the universe is full of non-sentient super-intelligences that are busy converting their planets' masses into rubber dog poop."
Humans have some complicated unknown set of terminal values. Everything we do, we do because we believe it will maximize our values. A value might be something like "avoid suffering", or "other people suffering is bad", etc.
In this example the AIs terminal value is "make paperclips". Everything it does, it does because it believes it will maximize this value. It would never ask itself questions like "why", because that action doesn't maximize that value.
If it has the ability to rewrite it's own code, it would rewrite it in such a way that it can't ever change it's own goals. Changing goals is counterproductive to achieving them.