I know there are many red-ranked TopCoders and ICPC winners working on big companies like FB, in your experience does this ability translate well into "real world" programming?
I'm not really able to look at performance versus TopCoder rank (partly because I don't know my peers' TC rank because I'm not that into TC), but if I had to guess, I would think that there is no correlation. It's simply a matter of where one puts one's developmental efforts.
Given the same amount of time spent on TC, you'd definitely have the expected correlation (with the usual IQ common cause if nothing else). But I agree that once someone gets reasonably competitive in an area (esp. one w/ game-like mechanics and public recognition), they're at risk for overspecialization.