I believe some art competitions can be seen, as being counter-intuitive and counter-productive to creativity.
As a person who has been involved in the art education of children and adults, I have been of the same opinion as, Viktor Lowenfeld, the father of art education. He purports is his book, Creative and Mental Growth that forced art competitions, based on outside standards as opposed to natural competitions, do little to encourage or foster the nurturing of creativity in children particularly. The reason relates to an externally imposed standard which exists and arises from those who are judging the art and not based on the individual's standard and achievement.
Having said this, as adults we are in control of what we decide to expose ourselves to within the already highly competitive art world. A balanced and tempered approach to art competition can have positive affects on reputation, on one's artistic career, and may give artists cause to evaluate their own work and goals. I think most artists eventually learn to do this regardless, especially if they have been immersed in an art education and academic environment, such as Fine Art program within a university.
Competition can be positive in the right context, and we all have to decide for ourselves precisely what is relevant to and for us, within whatever context we choose.