It's not actually a bad idea, it costs the dev's nothing, it gives LFS more exposure, not only in the advertising of the contest, but for the newly licensed driver telling all his mates how cool the full version is etc, etc.
Of course, it is frought with problems, but overall, I think its a good idea.
That said, I do agree that anyone with more than a passing interest in sim-racing should really already be licensed, but there are circumstances where this isnt possible.
Dan,