But it's traditional (or old-fashioned, at least) -- Virginia Gazette of November 26, 1736:

We hear from Hanover County, that on Tuesday next, (being St. Andrews Day), some merry-dispos'd Gentlemen of the said County, design to celebrate that Festival, by setting up divers Prizes to be contended for in the following Manner, (to wit) A neat Hunting Saddle, with a fine broadcloth Housing, fring'd and flowr'd &c. to be run for (the Quarter,) by any Number of Horses and Mares: A fine Cremona Fiddle to be plaid for, by any Number of Country Fiddlers, (Mr.Langford's Scholars excepted:) With divers other considerable Prizes, for Dancing, Singing, Foot-ball-play, Jumping, Wrestling, &c. particularly a fine pair of Silk Stockings to be given to the Handsomest Maid upon the Green, to be judg'd of by the Company. At Page's Warehouse, Commonly call'd Crutchfieldin the said County of Hanover,where all Persons will find good Entertainment.

:-)

(I found this ad quoted in a scholarly article on fiddle contests, the author of the article says it's "oft-cited". Chris Goertzen (1996) "Balancing Local and National Approaches at American Fiddle Contests", American Music, 14(3):352-281.)

The same strong voices on the topic are heard here as have been heard before... I'm not sure that they actually address the original poster's inquiry.

Personally, I see the risks, but I've experienced the fun, too. I'd hate for competition to be a preeminent forum for traditional music (the hazards of this have been shown clearly), but I see no reason for a blanket blackballing of the idea. The music seems to be surviving just fine.

But, that's my approach to many arguments.

~ Becky in Tucson