Trading competition has negative effect too because it can make you to become too focused on the competition that you would not want to lose which is not a good habit all the time because it can make you do things you would not like.
I think trading competition is for those who are already very skilled in trading. Even though anyone can follow it, the results probably won't be as good as expected. although there are positive impacts as you say that can be obtained.
This competition is of course given a certain period of time and that creates pressure for a trader. Moreover, the target to be achieved is certainly high and it will be difficult for those who are not really experts in trading to compete.