Perhaps it should be mentioned that this event was at a non-profit community art center and not a commercial gallery. While that still doesn't smooth over or excuse what happened, it's not quite the crass commercial rip-off some are suggesting. Usually in these shows for non-profits, the entry fees cover the prizes, some sort of honorarium for the jurors, and any overhead or publicity for the show. In this case, I believe any funds beyond that go to help the center provide financial assistance for needy students who avail themselves of classes offered there.
Think of it as playing the lottery, but you have to bring pictures.
(Back channel communications confirmed that Derek and I were indeed at the same show.)
Scoping out what sort of work the judge does is a common thing to do, but I think a caring judge would try to use his knowledge of technique, composition and style to select diverse works that have shown competence in those areas. Of course, I'd like to see world peace and an end to hunger also ....