Absolute fucking bullshit. There's no harm in having the test. If you can drive safely, you'll pass the test. And if I have to take a day off work to haul my ass to the dmv to get a new photo taken every few years when my license expires, a retiree can certainly find the time.
The problem with the elderly is that they're basically children. They don't always know when their actions, or inability to act quickly, will end up harming someone else. They would also rather lie than suffer the indignity of having to show they are qualified to operate a vehicle.