When the EFDSS used to run Sidmouth, Whitby and Keele/Loughborough festivals, there was usually some sort of competive element for those who wanted to.
Then it was what you did and indeed Comhaltas used to use C#H as a venue to run its own competitions.
Nowadays the ethos is that no child should leave the party without a prize.
I really couldn't care less either way.
If there is a demand to compete then those who wish to should have a platform to do so.
It is, a means of bringing out the best in certain, though not all, musicians.