What exactly does the host of this event lose by de-listing the game? What goodwill are they burning with developers by taking such a harsh stance? I'm seeing a lot of fellow developers upset by this decision and reconsidering participating in the future compos.
Ok, so you've listed some ethical precedents. Yes, it's true that there are a lot of creators who are willing to license their products as shareware, but that doesn't mean that everyone has to. From an archivist perspective, I would much rather there be accurate records kept that acknowledge all entries, even if those entries aren't available to play anymore. I'm literally writing a book about homebrew games made during the early days of the internet, so I know how frustrating it can be for games to disappear to history.
But at the end of the day, it's about a creator wanting to protect their copyright in order to sell it. If the compo truly acknowledges that creators could want to turn their entries into commercial products, then they shouldn't stand in the way when creators want to.
Speaking of social contracts, I just think that non-developers shouldn't have such a demand on the free labor of creators. If they want access to a game, they should pay for it.