I have submitted dozens of entries and we will see if it was worth it. I am doubting that it was.
I agree the contests are 'geared' towards the holder, and they hold a significant advantage, but I hope you're not measuring the 'worth' of entering contests based on whether you come away a winner. If a different design is chosen instead of yours, how is that the contest holder's fault? You agreed to work on spec, and they are not obliged to pay you. If you haven't won, you've been 'outperformed' (at least in the CH's eyes) and you shouldn't hold that against them.
I was coming to this forum to post on this exact thing but then I saw this thread.
I see it as a big problem, but I keep entering into contests, so stupid me right? lol
Some say to simply not enter contests where the contest holder hasn't been around SitePoint for a while and has held other contests. That's obvious, but the fact is that there are far more first time contest holders than there are return contest holders.
If SitePoint doesn't want to act as an escrow service (which I can understand) and get the full prize money up front before the start of the contest, then I think something they could do is like what ebay does? For each contest holder/entrant, have some sort of feedback system in place so that once a contest is finished and work/money has transfered hands, both parties can leave either positive or negative feedback. There may be other better ideas out there, but that's just something that came to mind. It would allow contest entrants to look at the CH's feedback comments from other past entrants before they make the decision to enter into the contest.
Also, since returning CH's are not the problem, it's generally your first time CH's looking for some inspiration so they make their own cheap copy of their favorite logo, why not make first time CH's prove theirself by charging more money up front for a first time CH? Like for their first contest, they pay a $150 or so up front to hold the contest, non refundable. This would stop some of your bogus contests as majority wouldn't even waste the $150 to hold a fake contest for inspiration. After the contest is complete and they have chosen a winner, the next contests they hold, it's the normal fee.
I don't know, maybe these aren't the best answers, but there's got to be a way. lol.