(there seems to be simple ways for kaggle to solve this: put a delay on the score generation, limit number of submissions, limit precision of scores on the public leaderboard)
The published dataset gives contestants an idea of how good they are, but prevents gaming the system by overfitting, because the contest is actually scored with the second unknown dataset.
A more in depth explanation on the use of three datasets for model building can be found here: http://stats.stackexchange.com/questions/19048/what-is-the-d...
There is a limit on the number of submissions. Usually 5 or less a day. Also precision of scores is visibly limited, but for final ranking all decimals count.