Both first-come-first-serve and random selection are better ways to admit people to a hackathon than "let's play college admissions committee."
HackMIT came up with a nice hybrid solution this year [1]. Most spots were filled by lottery, but a few were reserved for the first people to solve a puzzle. This left a place for merit --- but, like, actual merit, which is not well-assessed by a 19-year-old college student scanning resumes for "placements at major hackathons."
[1] https://medium.com/hackmit-2014/joining-the-fancycat-club-ha...