but it seems we have developed a brain with a capacity that is far greater then our needs. So in terms of evolution, why did it develop greater capabilities then we actually need to survive?
We see in many species attributes that are more than necessary, or even detrimental to long term survival, because of sexual selection. We started getting larger brains to account for survival, seeing as how we're not fast, we don't have armor, and we don't have weapons, we need smarts to stay alive. It's just another, of the many survival mechanisms that have been tried by nature.
But once we start getting larger brains that are capable of planning, forethought, even creativity (all of which are good for survival) sexual selection can lead to a sort of cascade effect, and as art and beauty appreciation advance, it just speeds up the sexual selection.
For example, a primitive female hominid has the choice between a male that can run fast and quite often escape danger by running, or a male that doesn't get into danger as much, can help find food by noticing patterns, and will therefore be around longer to help care for offspring. Does it seem out of the question for the female to choose the second male over the first? And once that type of selection gets a hold, then you have an arms race fo sorts, now the females are choosing between two mmales who can avoid danger, notice patterns, etc, but instead of just bringing food, one of the males also brings pretty flowers.
Once you start down the road of sexual selection, results can be incredible.