CAPTCHA Fail

I can understand the need to filter humans from machines on the Internet, but we need to do a much better job. It seems like the most common captcha software I run into these days is reCAPTCHA. The system has some noble goals - specifically, users who submit captchas are actually helping digitize books. However, here's the problem:

What the hell does that say? The first word is obviously "the", the second? "Claccupr?". Perhaps I have bad eyesight, but I often get these wrong. Here's an alternative proposal:

Instead of asking humans to perform text recognition (something computers can already do reasonably well), ask them to do something that comes naturally to humans, but not to computers. How about asking the user to pick which image they might find at a beach. Or ask the user to pick the image that represents the largest object in real life. Use context that humans understand instinctively, but computers do not.

Any ideas? Someone should build it!