My view (for what it may be worth ) :
Images in this type of competition usually centre around "Composition", which is largely instrument independent.
As someone who has two 35mm SLRs and four digital cameras, (ranging from a humble 3MP P&S through to a Canon DSLR) I can give you a plethora of examples.
What does differ from photographer to photographer is Experience (described by someone as the 'Eye').
The experienced camera user will have a much higher success rate when it comes to images that openly differentiate themselves from those from a less experienced photographer.
However, quite often, the user of the P&S (the less experienced person) is at the right place at the right time, and also captures those 'Wow' moments, irrespective of composition.
I do follow the line of thought that every person has a creative side, but few exercise that ability, mostly (I've found) due to self doubt.
Where I would agree with you, is that future such events make provision for subdivision of images into "Minimal PP" (limited to cropping and minor touch-up) and "Full PP" ones.
Thus (imho) the amateur would be motivated to improve their efforts to the full limitations of the instruments available to them, while the more experienced (not necessarily owners of more expensive equipment) would battle against their peers.
Naturally, this would also depend on the honesty of the submissions into the two catagories.
Then again, I could be wrong.
To conclude, here's an example of what a reasonably simple 3MP camera can do:
http://i42.photobucket.com/albums/e341/Wizzard30/Nature/PICT9596.jpg[/IM][/QUOTE]
Well said.