Pwn20wn is probably the high bar for programming contests. Charlie Miller can walk in there and drop a 0-day for Chrome on the judges and walk out with a check for $100k. Is this not the market at work? Is browser sandbox security now such an integral part of the internet security landscape that it warrants the need to pay, and pay fruitfully for the knowledge of how these exploits work? A young guy, maybe 18, nobody heard of, with no real internet 'cred' from Eastern Europe, who had no real degree or CS education, walked in with an IE9 exploit that defeated DEP once it broke out. It also worked around address randomization.
Unless that guy shows up and earns his rep that way, what's he going to do? Just start a blog and put the exploit code on it?
I would argue that these programming contests are pure market forces, about as pure an application of the free market as one will see on the world stage.