Interesting question.So it makes sense that many people who ARE competitive (by nature or by nurture) would apply the same approach to their music as they do to their sports, business, and every other part of their lives.
So I see this as a personal choice, To me it has less to do with the music than it does with the individual's preferences
The above is my general take on it.
I find all the opinions expressed here as valid.
IMO....these 'contests' are ultimately just another way for one to get exposure, promote themselves and gain fame or recognition in their field.
Nothing wrong with that....they all still have to work hard to achieve their personal goals.
Me...I'm not a competitive person, don't care about being noticed and have never felt inclined to prove I'm better than
anyone at
anything.
Obviously, contests don't work for me.
I only compete with myself on different levels throughout life.
In this context it's just to become a better song writer even though I fully accept my perception that what I write won't ever end up in the mass appeal arena.
My only real goal in music would be to remain distanced from the
you totally suck genre.

Carry on....