Great point, but it's not easy to do. BMI? C'est simple, which is IMO why it persists regardless of how dumb it is. Hell, waist size has even been demonstrated to be a better indicator than BMI.
Hip size is apparently a better indicator even than waist. The Body Adiposity index uses hip and height. Apparently, I have a fat a$$... as that index brings my body fat percentage up much higher than using every other do it yourself at home estimator out there...although reading up on teh BAI there is some lack of data for caucasians, and it has been shown to be unreliable for certain body types.... but it appears better than BMI for must muscle bound folks.
http://www.shapesense.com/fitness-exercise/calculators/body-adiposity-index-calculator.aspx