Couldn't agree more with everything said in this article. Well done.
I want to reiterate on the fact that multi-tier demoing just does not work. While the prizes and judging are important pieces of every hackathon, they really are not the main focus. These events are about enabling hackers to show off their skills and experiment in a fun, safe enviornment. When you start grouping hacks into "the best" and "the rest", you end up with the focus being on the product rather than the people. And that fundamentally sucks.