"I would imagine that the 100 people would buy a Program plus several drinks and food throught the day as would the 10 who came through the door."
JMHO, but I think you're making some false assumptions here. For starters, what you propose MIGHT be true if the venue, competition organizers and concession stands were all one and the same entity. The odds of that being the case are fantastically low, at least for an organizer of any size (maybe your local highs school dance club?).
The competition has to rent a venue, probably at considerable cost. I'm not in this business, but I'd imagine the venue probably contracts out concession stands, at a flat rate for set periods of time (e.g., monthly or annually). The venue also has to cover the cost of general maintenance and clean-up after events, not to mention the standard items like heating, cooling and electric (both while the buildings in use, and when it's empty). So exactly how would your idea work?
Let's look at it backwards: as you propose, the concession stands would make a killing. How does the venue work? Do they charge a flat fee for the users, or do they also take a cut at the door? If the latter, they'll have to make up the lost revenue by charging higher rents to the concession stands. The concessions stands are going to look at the higher rates, look at previous attendance records, and likely decide to go elsewhere, because they don't see evidence people will show up to in sufficient numbers to make enough profit to offset the higher costs.
If on the other hand, the venue charges only a flat fee, how do the competition organizers make any money, to cover the cost of renting the site, promoting the competition with ads and mailing, doing all the set-up and take-down, covering the cost of judges, etc? The organizers probably have no standing to negotiate anything with the concession folks, but let's suppose they do. So...they suggest they'll let everybody in for FREE (or whatever discount you prefer) and then take a cut from the concession folks, based on the expected greater sales. And again, the concession folks look at attendance data, and take a pass. And meanwhile, the organizers have to deal with up-front costs -- probably AT LEAST a deposit on the venue, the advertising, etc. They get some money now from advance tickets registration, but under your proposition, the money they get from tickets will diminish or even become negligibly small.
A lot of thoughts might look really nice and simple on paper, but they don't work in the real world. JMHO.