Events like Guild and MTAC's Certificate of Merit program are great motivators for students, parents, and teachers. ...
What is motivation? And what is a student motivated toward? The real motivation is the music, and the learning in the music. These things can also get in the way of motivation, because while you want to delve into music and the learning, you constantly have to aim for these external things and other people's agendas and approval instead. It is like stars and grades in school. Apparently math and science and reading cannot be interesting. The stars and numbers beside your report card are more important and more interesting. These kinds of "motivators" are carrots on a stick. They represent a focus away from the music, because the music cannot be interesting in and of itself. And if these events cause stress, or if there are bad grades and such, then they actually DEmotivate. Perhaps the student would be fascinated by what he can learn, but the specter of this judgment keeps it at bay.
I'd say that the real reason to enter any event is to gain experience in such events. Music has a performing component so playing in front of others is part of music - for that reason.