The below is not entirely true. Being long listed for (but not winning) the Terry O'Neill award got my work a full page in the Sunday Times Magazine, which was useful for me at the time.
The reality is that if you want the best chance of being considered for things like grants, in addition to good work, you benefit greatly from history and 'credentials' i.e. other people or organisations having 'validated/recognised' your work, which in turn make donors feel confident enough to give you their money. How you go about that can be as varied as it is intelligent. High-profile competitions can help build that credibility. Whether you think it a good thing, or whether you think it should be needed, is a quite separate thing. Galleries pay attention too.
Comps are far from everything, but it is also not a 'win or lose' activity. Its about building a resume/CV and recognition by institutions, which depending on what you wish to achieve, may be irrelevant or hugely important. It can also be about learning how a panel of judges (whose backgrounds and activities you have researched) respond to your work. As always, it is personal choice.
Have a look at the resumes of many of the best known documentary and fine art photographers and you will see how many have won awards (posh name for competitions of some type or other). This has not happened because they are irrelevant, but because they are considered part of the 'costume of credibility' even for those whose work is blindingly good.