It's good example of problem solving thru observation but it begs the question of just what do we mean by intelligence. Personally I think self-awareness or conciousness is part of the answer. The most "intelligent" animals also seem to be the one's with the greatest self awareness. Come to think of it that seems to apply within a species as well, at least with humans!
Another way to think about the question isn't why dino's didn't develop "human like" intelligence and there is no evidence they did but why for example are chimpanzees so dumb compared to humans. We're 99% genetically the same an yet we're an order of magnitude more "intelligent". One theory is something akin to "neural density". Brain size alone isn't enough, the number of possible connections is and we have 4X as much as chimps although personally i find that idea a little too simplistic. Of course chimps have minimal self awareness too.
But to answer the original question re: dinos
1) They didn't get the mutation (whatever it is) that allowed human like intelligence/awareness to develop
2) They did get the mutation but it didn't confer the same advantages in that place and time.
3) Environmental pressure was lacking. Hard to prove since we know far too little about dinos but if you can become the dominant species WITHOUT intelligence why waste energy on it?
4) We don't know because we don't really understand intelligence very well.
take your pick