I found this page on why chess tournaments are actually good for kids:

http://www.masscharterschools.org/fellowships/docs/159/Chiappetta5.html

Chess tournaments are a tool for developing healthy competition, sportsmanship, and inter- and intra-school community. They provide students with intellectually stimulating activities that extend beyond the classroom and into those times when youth are most at-risk (after-school, weekends, and school holidays).

Successful chess players demonstrate an ability to think critically, analyze situations, train their memory, and make decisions under pressure. Through tournament play, chess players also learn how to win and lose gracefully (and good coaches help students through such challenges); they learn to positively interact with fellow competitors regardless of age; and they learn that intellectual pursuits can be fun and cool. Further, research shows that chess improves reading scores and emotional intelligence (Marguiles 2004, 2).