The $1000 prize is not worth it. It's not worth it for an established designer nor a fledgling designer. The time spent on the chance of being selected is far better spent doing one of two things: working on your portfolio presentation or approaching prospective clients. The fact is, designers are regularly under appreciated and their work is misunderstood. These types of projects only amplify that under appreciation and misunderstanding, while placing their work in the hands of a potentially unscrupulous individual with no contract in place.
A comment in the linked article states it plainly: if Kawasaki wished to encourage new, undiscovered designers he could easily have used his large network to identify and review portfolios. That would be either the honest method or the non-naive method of finding the designer that met his criteria. So really the question is, should I assume Kawasaki was naive?