Undoubtedly the single stupidest fetch quest I've ever played was in the old, old, OLD game Betrayal in Antara. The game was kind of like a pre-Oblivion, but the world was realistically large (it took several in game days to travel between towns, and the days, while not as long as an actual day, were still pretty darn long) and there was no fast travel. Traveling from one town to another could take as long as forty minutes, and because you got very little direction about what there was to do out there you could easily spend forty minutes heading to one town that sounded interesting, only to find out that the gate was locked and you weren't allowed to enter until later in the game.
The stupid fetch quest part requires a short background: one of the main characters, a young country bumpkin named Aren, has just discovered that he has magical powers. Now, magicians are dangerous if they don't learn how to control their emerging powers, so he and his new friend set out for some big city to find this famous mage who can teach Aren enough to keep him from blowing himself or anyone else up. A nice, simple first step to get you out into the world, right?
However, when you find the mage, he refuses to teach you until you go and find him some rare tea that he likes. There is a shop in the nearby city that supposedly has the tea, but when you get there you find out that the shop has been robbed and everything has been taken, including the tea. He tells you that the local loan shark and his goons trashed the place, and to go talk to him about it. The loan shark then has something he wants you to do, and so on (I can't remember the whole sequence, but if you don't know exactly what to do it easily takes six or seven hours of tedious, continuous play). Finally, after all that, you get the tea and bring it to the mage, who "hilariously" discovers that he actually had some left over in his other pocket, and therefore didn't need the tea at all! HA HA!!
What a stupid game...