Some of the inherent value of the work for the small prize pool is more the opportunity of doing well and being recognized for that work.
Data Science, or trendy statistics, is inherently fun which is also what makes kaggle fun. Discovery in data will always be popular among people who love to solve problems.
To your other points, I don't disagree with you-- all the steps just to participate are becoming more work than its worth, at least for me. I do a lot of the same problems asked in kaggle naturally at work.