I'm not sure I understand why it is unfair to the participants. The regulations state "non-exclusive perpetual license". That is quite a standard option in commercial photography. It is similiar to buying a stock photo. It does not stop you selling your image to other agencies/ stock. The only question to ask yourself is whether your prize is sufficient compensation for this license. I agree with sprewell that the prizes seem reasonable enough for this purpose.
I've always thought that people find these rules rather harsh because it does not apply to only the winning photos, but rather they have the rights to use ALL photos that are entered for these competitions?
Most times its.
# agrees that ... may, at any time whether during or after the competition, reproduce, distribute or publish their photo image(s) submitted for the competition whether for promotional or any purpose whatsoever in either electronic or print format and whether online or in any media including but not limited to exhibitions, galleries of any description or any publication, without payment or compensation to the participants.
# shall grant to ... a non-exclusive, sub-licensable and perpetual licence to use, reproduce or modify in any way which ... deems fit all the images submitted in the competition, without ... having to pay any royalty, fee or charge whatsoever therefore.
Composite photographs, multiple exposures, and images manipulated electronically that distort the reality of the image or otherwise will be disqualified. Adjustments of contrast, saturation or levels are acceptable.