I'd agree that crowd sourcing might not always be the best way to approach things. But the general situation that the person who gets the final result wins very likely does inhibit effective work on the solution of very difficult problems.

I mean, I think there's a consensus that if Wiles had been publishing his results as he went along, Fermat would have been solved earlier but probably not by Wiles himself. Whether the current N/NP proof is right or not, it also is clearly the product of long work in a vacuum. That's not the best way to do things if nothing else as a matter of sanity. If you're publishing as you go along, you've got a lot more of a sanity check. Further, if research is open, you can do single person, small-committee and crowd-sourced versions.

Still, I don't think this primarily a matter of the Millennium Prizes in particular but of the tremendous competition of academia in general - Wiles' effort happened before the Millennium Prizes - and he couldn't get Fields Medal either - too old.

Oddly enough, the Netflix prize actually seems to have produced a fusion of efforts in the end. Perhaps future prize creators could think about that. Both the Millennium Prize and the Fields Medal seem deeply problematic in their effect on mathematics in general.