I guess my take is a bit mixed. Yeah, they can be a door opener, no question. Seeing that 'winner' or 'finalist' tag on a query letter makes an agent pause for an extra three seconds, and in this business, that's everything. But I've also seen writers get completely derailed for a year, endlessly tailoring pieces to contest guidelines instead of working on the book they actually burn to write. The feedback, when you get it, can be wildly inconsistent—one judge loves your voice, another thinks it's cloying. You're basically gambling your creative energy on a panel's specific taste on a specific day.
I submitted to half a dozen big ones early on, got nothing but form rejections, and felt like trash. Then I placed in a tiny, niche contest nobody's heard of, and that little credential did more for my confidence than anything else. It wasn't the 'prize' that mattered; it was proof I could finish something and send it out. That momentum got me to complete my manuscript. So the impact isn't always the big, flashy book deal. Sometimes it's just the permission slip you give yourself to keep going.