He didn't say the item doesn't apply, he said that it is a warning sign. Holding a contest doesn't make a product snake oil, but it certainly correlates to snake oil products.
I've been partial to the crypto community since the early 90s and there appear to be three popular ways to dismiss one's security work without bothering to understand any details -
1. Quoting an item from the snakeoil markers list
This is the most popular method. It has a good
mass appeal as it clearly implies that your
opponent is a complete idiot and puts him in a
position of needing to prove the opposite.
2. Gutmann Sound Wave Therapy quote
Whenever someone thinks that they can replace
SSL/SSH with something much better that they
designed this morning over coffee, their computer
speakers should generate some sort of penis-shaped
sound wave and plunge it repeatedly into their
skulls until they achieve enlightenment.
This is as great, arrogant, includes a "penis"
and generally makes first-time impression. It
can't be used too often unfortunately.
3. Invoking Kerckhoffs's principle and alike
This is a sophisticated way. Don't really need
to understand what the term is or if it applies
in a given case. The idea is to just dazzle the
opponent with obscure terminology to show they
don't know a shit about cryptography.
I'm not asking because I think I know the answer. I don't. I don't follow crypto the way you follow crypto; I am interested in it exclusively to the extent that it allows me to break software. You seem to follow the community as a whole, which is not an interest I share. So you probably have some insight into it that I lack.