I'd think the purpose of levelmaking groups would be to 1) help newer users improve their works and learn to collaborate from other people and for people to learn from each other (thus improving) or 2) Getting a bunch of talented level builders together so that they can bounce ideas off of each other and produce some unique levels from all of the ideas each of them have.

However, I don't think competition between levelmaking groups is necessary bad. It helps promote the creation of good levels, which is never a bad thing.