Thanks for the comment - we're happy to listen to community feedback, especially if it looks like we're doing something dubious - and I promise, we're not trying to!
I'll try to address your concerns:
* Maybe we could have explained it better, but the competition is about writing the best predictive model, not correctly guessing the results of the tournament. Football results are not deterministic - the best anyone can do is write a thorough probabilistic model that is correct more often than not. We can only judge this competition based on the source code, because the methodology is more important than the outcome.
* We have modified our terms to try and address some of your other points. We ask for submissions to be under the MIT licence so that we can promote the winning entry and share some of the best ideas with the community. We're not interested in using solutions in our own products.