It makes sense to do so, because games and streams do not compete with one another as much. Edits of someone's stream probably competes more with the stream itself.

Yes, it makes sense for the game company. The stream is more of an advertisement than competition.

I can see that if you organized game-streaming as an entertainment provided by a company, that company would most likely want to hire an editor to provide a best-of version.

(That's essentially how all those reality TV shows like Big Brother worked. Plus some extra dramatization, of course.)

There's economic value to consumers in getting the best-of version, so I am hoping that the participants will find a way to share the larger cake.