Contests like this, which reek of being run by folks who would make off with the coins from a dead man's eyes, are a big reason why. To boil it down: you pay an entrance fee of $149, after which the people running the contest own all rights to your work, whether you win the contest or not. And if they decide that not enough people entered, then no prize is offered...but they keep your $149, and the rights to your work. So basically, they expect you to pay them to take the rights to your work.
Don't fall for this, folks. Please oh please.
Here's another response to the contest, where the person actually running it shows up to defend herself. This made me laugh:
So to post our rules and a link telling people that this is a contest to avoid is both self-serving and misleading. Are there issues with the rules, yes. But I think you should wait until the contest officially launches on Feb. 11, 2011, before you tell people to not join it. That's the fair thing to do.
Er...ummm...if it's not fair for someone else to call people's attention to a contest that hasn't started yet, then why did they post the information about the contest already themselves? "We're going to post our contest rules! But it's not fair for anyone else to call attention to us!" Yeah, right.
There's a rule that often gets cited on Websites and discussion fora and anywhere else where such things are discussed: Money should always flow TO the writer. If anyone tells you that you need to pay prior to being published, go deal with someone else. And don't bother with contests like this.