I really think it depends on the event and the age of the children. I have always played games, fairly, with my children. I have never LET them win and I am very against letting a child win because, in life, sometimes you just lose, you brush yourself off and get back in the game. Sometimes, it's in losing that we learn the biggest lesson (learned that the hard way this Spring!)
I think in healthy competition, it is nice that all teams get some kind of recognition. However, I think competitions become unhealthy because, a lot of the parents are putting so much emphasis on winning and not enough on fairness or good sportsmanship. In baseball, for example, the players that are deemed "the best" are the ones who always get the opportunities to pitch more and get the plumb positions. By the time the 6th or 7th game of the season is played, you just know your child will be overlooked if they are one of those kids who "tries hard" but the coach doesn't want to risk losing a game by trying your child on a different position - so they don't get rotated, even though your child would love to try a new position.
I think competition is good as long as it is fair. The older my children get, the sadder it makes me to see my children involved in competition where parents are so aggressive and blatant in their comments to their own children, the coaches, even getting into arguments with other parents in front of their kids.
I like competition. I just like to see good sportsmanship and I like to see well-behaved, enthusiastic parents enjoying it. Thanks for the question.