Pwn2Own is harmful. Jon Oberheide's article[1] convinced me of that. Bug bounties encourage the disclosure of vulnerabilities as soon as they're discovered; contests like Pwn2own, with specific starting dates, encourage the accumulation of undisclosed vulnerabilities until the contest begins. It unnaturally extends the lifetime of bug, and hurts users by leaving them vulnerable for longer than necessary.

[1] http://jon.oberheide.org/blog/2011/03/07/how-i-almost-won-pw...