This article doesn't mention the Hutter Prize of course, since it was started a year later, but it looks like Matt has written about it since then: http://mattmahoney.net/dc/rationale.html

Right now the biggest thing holding Hutter Prize back is the shamefully low compute and memory limits: "Restrictions: Must run in ≲50 hours using a single CPU core and <10GB RAM and <100GB HDD on our test machine." http://prize.hutter1.net/

To even begin approaching intelligence, the compute and memory limits probably need to be 100x or 1000x larger.