Well, i've won two contests that i've entered in the last hour only and one of them was of 500$. I did not enter them intentionally, it happened while i was browsing contests, bumped into those ending in last hour. I skimmed through the brief description / checked the top entries and felt they did not meet what the clients want ( from my own believes ofcourse ) and thought i could present something good that might be of interest and good to the client.
Now, that being said, after finding out that my designs were chosen, the client asked for alot of modifications / variations they wanted to see first to make sure that it was good to go for them and would work best as they visioned, i did that and ended up having my logo being chosen.
So, i do not see something wrong with that, as long as its not a strategy / habit followed on. But, again, its the client who decides what is really good for their money or not.
If you had a really really good one that you thought was close to something you might have visioned or really looking for submitted in the last hour and its a strong contender to your top favorite, would you just let it go because you believe its not fair to come in last hour ? maybe you will, maybe others won't. That at the end is totally personal choice, simple as that.