Competitions are not perfect for sure, and there is obviously a human element to them. There is a chance you get a judge that does not perceive your beer the same way another might. Bottling, handling, storing, shipping...... none of it is a perfect science. Sometimes you can get an honestly poor judge. However, I don't think competitions are total crapshoots either.
I have brewed beer for 20 years. Even though I never entered any competitions for most of that time, I know for a fact that the beers I brewed the first 10 years would have had zero chance of making it through a regional NHC competition now - not one of them in 10 years would have stood a chance. I have had a dozen make it through over the last 5 years. I credit a lot of my improvement as a brewer to using competitions, and blind feedback to tweak my brewing - recipes, process, packaging, etc.
In my opinion, the key to benefitting from competitions is consistency..... brewing a random beer and sending it to a random competition here and there might win some medals or piss you off with bad feed back - But, that is not going to really help improve brewing. Enter the same beer often. Rebrew the same beer style many, many times. Tweak single variables to see what it does. Go through the BJCP training - even if you don't see yourself judging a lot. When you can consistently rebrew the same beer over and over...... when you can hit styles and brew them well - not just for judges, but for yourself and your friends - that is when you will really start seeing improvement as a brewer. Not for everyone, but I found it valuable as there are relatively few serious home brewers near me and it provided a way to get a lot of feedback on what I was doing.
Any brewer can brew a good beer that gets misjudged poorly. Any brewer can brew a mediocre beer that gets lucky in a small category or with a particular judge. But, consistently brewing high quality beer, to style, judged blindly, against many other beers and consistently being singled out as well brewed (by scores, comments, placing, etc)...... that is not total random luck. People have blind spots for their own beer. Most friends and family either love free beer or don't know enough about beer to critically evaluate it. Competitions are just one way that people can potentially improve their brewing skills and knowledge.
I have mine going to the Milwaukee regional this year.