I think it really depends on the competition itself.
IMHO, there are competitions that I consider "professional" in their approach, and there are competitions that I find are just a joke.
I personally like Indy, AWS, and Winemaker mag competitions. I find that the feedback these competitions provide are about as objective as it can get. I have gleaned a lot of info from them.
I try to stay away from things like State Fairs. They are more geared for country style wines and very rarely have (what I consider) a qualified panel of judges. The last one that I entered, I actually attended the judging and was shocked and pissed at the level of unprofessionalism...
- They set the wine entries out on a table in full sun for several hours before the judging. This was in August and the wine was beyond warm by the time it was tasted.
- The judges were made up local businessmen. I spoke to one of them and asked him what made him such a fan of wine. "I really am more of a scotch drinker" was his response.
- The judges did not taste the wine, they drank the wine. Midway into the judging, they were obviously drunk.