Q, you are right, but I think what everybody is overlooking is that neither engine dynos nor chassis dynos can actually measure horsepower.
A dyno can only measure torque, and thereby plot the torque value at a specific rpm. From there, a mathematical calculation (as already given earlier) is then used to establish the horsepower figures by using the torque and rpms. Therefore, horsepower is only measurable indirectly, and is the result of BOTH torque AND revs.
Don't underestimate the importance of torque. Without it, a car wouldn't be able to even pull away cleanly from a set of traffic lights. The goal most current engine designers hold dear is a flat torque curve from just above idle right through to redline in a road car. The result is a vehicle which is both flexible and powerful. Any vehicle with a steep torque curve, or with the peak torque high up the rev range, is going to be unpleasant in traffic! Big port heads, big turbos, wild cams and free flow extractors all tend to push the peak torque higher up the rev range which is great on the racetrack, but not so great in typical road conditions.
For many years now, Euro car manufacturers have been focussing on torque to aid "tractability" or "drivability". One example of a flat torque curve in a performance car I've had a lot of personal experience with is the non-turbo BMW M3 six cylinder engine. Initially as a 3 litre, these engines produced almost 220kw at 7000rpm, yet peak torque was produced at only 3600rpm. These cars could easily be driven around town all day without effort, because the spread of torque made the engine very "flexible". Yet stomp on the loud pedal, and the other side of its personality made its presence known!
My old BF7 wagon had a n/a 2.2l engine, and peak torque came in at a very high 4800rpm. It had a noticeable surge of power that started at 4000rpm, but there wasn't a lot of grunt below 4k. It needed revs to go anywhere. Ironically my (bog-standard) BF5 single turbo wagon produces its peak torque at only 3600rpm, and it's much more pleasant in traffic than the BF7 was.
Torque is good. Lots of torque spread over a big rev range is VERY good!
my $0.02