... What are you thoughts?
Well I agree that touching your toes is not the end-all and be-all of flexibility. And, as you've pointed out, many people are able to kick head high without being able to touch their toes.
And kicking head high IS (much!) more important than touching toes.
Being as flexible as possible is a GOOD thing, however — there are no drawbacks to flexibility that I know of; it's nice to be considerably more flexible than you need to be. And I think that having specific goals, specific benchmarks, for flexibility IS important.
The "sit and reach" test is a standard indicator of hamstring (and to some extent, lower back) flexibility.
For someone who is a good foot away from being able to touch their toes, touching their toes is nice goal. For someone who CAN touch their toes, they shouldn't be satisfied: they should work on laying their chest down on their legs.
Another useful benchmark for flexibility is, in Chinese splits, being able to touch your head to the floor. And, if you can do this, push it further by trying to lay your entire torso down against the floor.
I think milestones are important because they give us objective goals. The problem is that sometimes people mistake milestones for finishing lines! (for example, black belt rank!)