It's exploitation. Period.
A lot of corporations and organizations do this to the professionals on a daily basis. Artists, photographers, graphic designers, etc.
It's not right.
I also hate these so-called competitions for a logo redesign, logos for events, etc. They always award small prizes such as $500. It's a joke. It is a form of exploitation.
A logo can be very difficult to get for under $1,000 due to the research, thumbnails, revisions, mileage, printing, etc. They often go for thousands and thousands for the big corporations due to the amount of work involved.
They need to start respecting the artists, photographers, graphic designers and such.