It has nothing to do with sports, it's about competition(Chess, Poker, and any other skill that has a tournament... it's not all about sports).

Prizes are for the ones who come out on top... can you really claim you came out on top simply because the best team from last year weren't allowed to play? No, because you're not the best. If you were the best you'd beat the team who won last time instead of just pushing them out of the way.