yea, not all contests are like this. The thing it should say is "artist retains all rights to the work" and that they can't use all the entires for their own gain. Like I said before, many companies aren't aware that they are doing anything wrong when they do this kind of thing. Others, however, are looking to get a bunch of work for free instead of paying.for it.
An analogy I use in class is my home remodel. Say I'm going to need new cabinets (much like these companies need content for their t-shirts, ads, and whatever). So instead of paying for cabinets, I hold a cabinet making contest. Whoever makes the cabinets I like the best, I will use and install in my kitchen. And all the other cabinets that woodworkers submit will also be mine to do with as I please (sell or whatever I want). So everyone is out all the work of building the cabinets and no one got paid anything. Meanwhile, I now have new cabinets and didn't have to pay anything for them. And, I have more cabinets I can actually sell on craigslist and I can actually profit from this whole thing now! So all the woodworkers lose, and I win!
So when presented in that analogy, you see how ridiculous what they are asking for is. No one in their right mind would try to get a whole kitchen for free. But strangely, people ask this of illustrators ALL THE TIME. It's maddening!
