Lots of countries have arbitrary boundaries. Germany, for instance.
Changing Iraq's borders won't solve the moment's fundamental problem of Iraq:
1. Oil is not uniformly distributed in the country. There will be conflicts over who controls the oil fields and the money and power that goes with them. There would be a lot of conflict over how the border was drawn through the oil fields.
2. Iraq is made up of 3 main ethnic groups that have been in conflict for at least the last 30 years in recent times. There is a lot of mixing in their distribution, some of it at Saddam's behest. Many, many people would be displaced and feel resentment if the country was broken up. Some neighbors, e.g. Turkey, would be very upset if some ethnic groups got their own piece of the country.
3. Iraq was part of the Ottoman Empire. It became part of the Empire in [link|http://i-cias.com/e.o/ottomans_4.htm|1534]. Iraqi history is [link|http://i-cias.com/e.o/iraq_5.htm|very long and complex]. Boundaries are arbitrary, to a great degree, but getting agreement on where they should be is a very difficult process.
I don't think a partition of Iraq would make the situation better. In fact, I think it would make the situation a lot worse.
So saying "Iraq isn't a country" doesn't say much about what should be done. And the facts on the ground say otherwise.
My $0.02.
Cheers,
Scott.