I haven't judged a competition in about a year, but I'd say there are just as many terrible beers as ever, but there are more entries.
To be fair, there are often two kinds of bad beers submitted to competitions- the first are the "ugly baby beers" that are beers that are LOVED by their brewers. They don't taste a single flaw at all, and submit the beer to win the Best of Show. The problem is, just like with parents with ugly babies, the people who aren't in love with the beers (the ugly babies) judge them accurately and their feelings are hurt because they and their friends love the beer. I've had some astringent, phenol, estery messes and the brewer really had no clue.
The second type of bad beer is a "I brewed this beer and it's not good but I don't know what's wrong!" type of beer. They know it has off flavors, but they want to know WHY and what the problem is. It could be fermentation temperature, water chemistry, ingredients, infection, oxidation, etc and they want to fix it for next time. They send it in for competition to get it scored objectively so they can correct the flaws.
I've been in some competitions where the highest scoring beer was a 35. So, not bad, but certainly not a way to drink lots of free good beer!