Very true, although perhaps what Steve is trying to say here is that the opportunity cost of a business plan is (in his experience) a lot higher than most people think. Maybe you win several thousand dollars, however, if you spent that energy on developing an actual business you'd likely be much closer towards the realization of your goal.

"I have seen students spend well over a year refining a business plan competition pitch" - I think this is his main gripe. If you can do it without much additional effort why not.

The only non-dilutive financing is customer revenue.