Couple of quick things, and then I have to hit the road.
1. Competing isn't just about winning. It's about objective, external feedback. It's application of technique in a context where there are some stakes for loss. five minutes of rolling in competition is worth 100 hours of sparring in class, even with strangers.
2. A competitive ruleset is competition, but competition isn't restricted to a single ruleset. The best schools encourage students to test themselves in a variety of rule sets from IBJJF to sub only, to modified sub only to MMA.
3. Related to the last one, competition is in the Dna of Bjj. Carlos competed. Helio competed. All of the Gracies built their reputations personally through competitio from the top to the bottom. and if your name isn't Gracie, if you want to be a successful coach, you need to compete. Pedro Sauer, the Ribiero brothers, All,of the legends built their legend in competition. If there are issues with the test, The answer isn't to stop competing, it's to modify the test. Competition should be as diverse as the skills being tested, and in the past this would range from challenge matches to tournaments to vale tudo.
I'll post more if needed, as I can. But hopefully this helps to explain my thoughts.