A number of hackathons have done this to great success. If you want to expand a hackathon beyond ~40 teams, you do need to figure out a way to structure demos better, since less 2 minutes per demo is too little time to really show off what you built, in my opinion. And I don't think it's a poor idea to go beyond 40 teams for a hackathon like this (because then you have to start being super selective of who you let in, which sucks for teams who are new to hackathons).