This is biological nonsense. The intelligence of any offspring of any parent, regardless of their intelligence, on average will be closer to the average intelligence of the population. Basically two highly intelligent parents will have kids on average whose intelligence will be higher than average, but closer to that average than their super-smart parents. The children of parents who are morons will have kids on average whose intelligences will be closer to the population average than parents.
In the long run, it will make remarkably little difference to the average intelligence of the population. The most it might do is only reduce the average intelligence by only a very small amount. Insufficient to make any real impact.
There will be almost no change in the intelligence of the 97%. In fact, if anything they will be compelled to use their brains more. The achievements based on intelligence are more due to attitude than inherent aptitude. People who work harder achieve more.
As for there being any wisdom in the strategy, there is none whatsoever. It's plain bad biology combined with delusional ideas about inherited intelligence.
Added the phrase "on average" to sentences in paragraph one to clarify the fact that the proposed 3% sterilization will fail due to the genetic variance in the total population.
The expression of any genetic characteristic in nay offspring will tend to the population average irrespective of its expression in their parents.