You would get an unfair advantage if you could participate in the contest using a code base several man-months worth as a starting point, and be allowed to keep that code secret.
I really don't see any advantage here. There are thousands of open source frameworks out there which can be used in this competition. What makes you believe that a closed source code base is worth more than open source code bases?
The difference is that closed source devs can use (most) open source frameworks, while open source devs cannot use closed source frameworks. I don't think open source is inherently better or worse than closed source - both can be crappy or excellent. It's just that - assuming some closed source code is not completely useless - some closed source devs could potentially have an advantage over other closed source devs and over open source devs. I would be fine with that if after the contest, the end result would be that now everyone gets that same advantage (because the previously closed source would be opened up).
Sports analogy: suppose you're organizing a cycling race, and there are two factories of bikes, factory O and factory C. Participants can tinker with their bikes to make them better. However, if you buy a bike from factory O, you have to allow others to see and use your design mods, while if you buy a bike from factory C, there is no such obligation, and you can even use patents to prevent others from using the general ideas behind your design mods. I don't know which factory currently has the best bike models to start from. Would you consider it to be a fair race if some participants can buy bikes from either factory, while other participants can only buy bikes from factory O?
The point is: what's the goal of the race? Improving the quality of the factory O bikes (which is what I assumed to be the goal, since the race was called "Factory O cycling race" and it was organized by someone who claims to be working for factory O), or getting as many cyclists as possible in the race?
I don't agree with the statement "more software is better than open software". This could be true in the short term for people who are only interested in running software, not creating it. But in the long term, it's not even true for those people. "More software is better than open software" is exactly the reason why so many people are now struggling with their modern hardware to get a decent framerate on a game they own which was designed for a 200MHz cpu: that's because they only bought the binaries, and even though it should be relatively trivial to play that game on the 1GHz machine they have today, they cannot do it because they're forced to wait until someone does the huge work to make an emulator for their old hardware so they can run their binaries through that emulator, and even then, the emulator overhead is probably going to be too big to get it to run full-speed even though they're using hardware which is an order of magnitude faster.
