Which brings up the question of what all these academic machine learningists (especially the theorists) are up to? Why aren't they winning kaggle? Why aren't Andrew Ng's own grad students collecting the prizes? Some self-reflection needs to go on.
It's a little like asking why Electrical Engineering PhDs are not designing the new iPhone (probably some are involved somewhere, I know). Research and applications are two separate endeavors.
Furthermore, a competition only compensates the winner. That's all well and good for competitions, but sometimes science advances as much by finding things that don't work (and why they don't work) as by finding things that do.