No, Lelouch isn't stupid. But he is still, thus far, enslaved by his emotions for those he cares about. This can contribute both to his willingness to protect Suzaku/a major enemy and his livid rage at having his beautiful plans thrashed so easily. I think he wouldn't have been so pissed if it hadn't been Euphemia because of his feelings for her and his trouble with easily removing people he cares about. I predict he will try to talk sense to her, and that will be the start of much badness. I think his anger will get the best of him. Anger makes Lelouch sloppy.

That scene will forever be symbolic of Geass' love for crack... and pizza.