I have been noticing this for a few years now. Don't get me wrong we enter contests & I think they can be used for promotion. But now there are too many & it can devalue the currency. I remember when PDN came out with the photo annual about 10 years ago. Now PDN must have about 8-10 contests. Besides PDN there are other contests B&W, Panorama, Color...the lists goes on. Still my favorite is Communication Arts Photography Annual & in Australia I like the Canon APPA & Head On. I guess the bottom line is money & at $25.00 to $80.00 an entry a lot of income can be made. With some contests if you get in, then you have to download & print the certificate.
You are right on target, the bottom line is money. These contests can make a lot of dough for the sponsors.
I recall a contest I entered a while back. There was no entry fee - "winners" would have their photo published in a book. When I was notified that I was a winner, I quickly ordered the book at a rather steep price. The book came - 500 pages of photos, most printed at business card size and most of them completely ordinary. So there's the scam, proclaim almost everyone a winner so they can't resist ordering the overpriced book. Laugh all the way to bank.