Using hacking competitions to find vulnerabilities is an excellent way to both spot and solve deficiencies in the programs. Also, if the competitions reward the winners financially, it creates a disincentive for hackers to steal money illegally and provides them an opportunity to use their skills for positive contributions to technology.
Consider the scenario when computer software companies pay cyber security firms big bucks to be the first to hack into Internet sites like Yahoo!, Google and Amazon. A competition is a great thing in which various security firms report their findings to the software companies as a way to gauge vulnerabilities. Target could have used such lessons in November and December of 2013.
Not unless it is going to benefit the company to make their companies internet stronger and more reliable. Otherwise no because if one can find a weakness than they will just show everyone else how to do this. Leave the internet alone for a while we don't need anymore hacking and putting people information at risk.
I believe that these hacking competitions only encourage the hackers to attack companies. You can't contain their activities to these contests. Once you reward them for breaking into a company's servers, how do you discourage them from doing it again? By sanctioning their activity, you guarantee that it'll happen again, only not under controlled conditions.