It is a good trait in many ways, it drives people to put in the extra yards when they may not have. Given that so many things in life are when stripped down a competition.

There has been argument in Australia recently over schools giving the message to primary school kids that it doesn't matter who wins in there sporting contests. I think not only does this ruin a game (when someone isn't actually trying in a game I'm involved in I lose motivation pretty quickly) but it carries over to other areas and gives a kid of close enough is good enough mentality.