That is right. One of the first thing we were offered in Iceland was fish jerky. It smelled terrible, tasted worse, and was supposedly good with beer. The texture was dry and flaky, and very unappealing. I did buy some to bring home to my dad (who loves beef jerky) and show everyone else. My family was equally disgusted by the entire product, most notably the taste and therefore it became an exotic kitty treat for our chubby cat, who loved the stuff.
Iceland often served a number of very odd fish dishes, none of which we tried. I had food poisoning on my way to Ireland, and wanted to avoid anything I did not trust. It was also well out of our limited budget to splurge on a meal 4 times what we were planning to spend. We opted to buy Icelandic hot dogs from an outdoor stand... and those were amazingly good and cheap. We also tried pizza, which was as you'd expect, and ate a lot of yogurt, fruit, and sandwiches made from items at the store.
I would steer clear from the fish jerky unless you want to try something new, or think you'd maybe enjoy the product. If i did have more money and time, I would have tried the interesting fish dishes, maybe even the rare shark delicacy that is offered. I bet the fish and chips is extremely good as well. Again, on a tight budget, food is one of the first things that you have to skimp on. I remember the orange juice being the most amazing thing to drink while hiking, and the candy shops we walked into were like right out of Willy Wonka, floor to ceiling with a million different things.
Traveling to iceland now might be a bad idea, with the economic problems. If you get the chance, take it, Iceland is like a dream world with a fantasy like quality. I felt often times like I was in Wonderland.
Have you ever tried fish jerky?