In my opinion the only dark side of competition is probably the acknowledgement of self-inferiority when it comes to writing music as compared to the others.
For example Berlioz made four attempts at Prix de Rome and finally succeeded at the last attempt. The great thing about such competitions(especially in Berlioz's case) were to challenge conservatism and explore boundaries and I'm sure much of the composers' lives were invested into these competitions.
He died at age 66 though. Competitions are good. :) They're challenging!