Meant to do this earlier but got busy organizing a hackathon ;) I think all parties involved should lower or at least get realistic expectations. That is sponsors, participants and organizers.
Can't recall the name of the person who said that, but hackathons are great for "sharpening your knives" and I would add - great to play with new tech and potentially meet folks you may want to collaborate with. As an organizer, I'm personally more concerned with how to do a better job at providing tech support and resources after the hackathon is over. Hackathons don't equal startups, let alone funding. And this is perfectly fine.
Hackathons are pretty bad ideas, I think. I think they've crossed the threshold into doing more harm than good. I've seen people get excluded. I've seen the same project 10x over. Further, teams are realizing they can stack the odds in their favors by having more graphic designers than programmers. For judges, prettyness outweighs function at these public, often broadcast events.
Yeah, I have started to avoid certain events. The Dreamforce hackathon with the 1 million dollar prize for instance looked way too much like a marketing gimmick for Salesforce so I declined. AngelHack is becoming more of a company launching program. I just want to write some code with new tech and meet fellow developers and designers
Just gonna throw this out there as a counterpoint ;)