1. Rewards, prizes and awards, including letter, number and percentage grades are all part of what I consider competition. They are all results of a competitive culture. Our current educational system is build upon these ideas and it is difficult to challenge what we are used to. I want to encourage people to do so.
When I consider the goal, the only goal, of school, I believe it is to learn. School should be a place where students learn about themselves, learn how to solve problems, learn how they learn and how they don’t learn, learn how to relate to others and become empowered to set goals and take on challenges in their lives.
I think that competition and learning do not play well together. Even in small doses, I think competition undermines learning.

2. I take issue with the binary of “competition” and “childhood praise at all costs.” I don’t think that consolation (like participation trophies or, as in the case of your story, the ridiculous idea of “Consolation Champions”) is the opposite of competition. To me, the opposite of competition is cooperation and collaboration. When collaborating, some ideas work better than others, people take on different roles and people step up and lead. People are working towards a common goal. In a competition, people are working towards the same goal, but at the cost of others. Someone has to win. For someone to win, everyone else has to lose. With every fibre of my being, I believe that losing, and even winning, is detrimental to learning.
What do you think the opposite of competition is?

3. When you said, “If the learning environment becomes saturated with competition, students will learn that learning is solely for the sake of intrinsic rewards. Thus, it is distracting and detrimental to learning,” I’m unclear what you mean by this. Are you talking about intrinsic motivation or extrinsic rewards?

4. Many students (especially those who win often) do claim that rewards help them to learn and to excel.
Competition is necessary in certain places, as in (some) sports leagues. I think, for those who claim to love competition, it is wonderful that they can participate. If someone is motivated by being the best and being recognized as such, they can find places to compete.
However, in a classroom, I want to see more teachers closing the door on competition. As in so many things, we don’t know what we don’t know. When being given a chance to learn cooperatively and collaboratively, I think that all students will find ways to excel. They don’t need a mark, a reward or an award to learn. In fact, the mark, reward or award can stunt learning, students become focused on what they will “get” instead of what they can learn.
What might happen if your students worked for the next month without getting any grades or rankings?

5. I strongly encourage everyone to check out one of my favourite educational thought leaders, Alfie Kohn.
Here is an article he wrote in 1987 called, “The Case Against Competition”: http://www.alfiekohn.org/article/case-competition/
His thoughts continue to evolve, as in this article from 1993 that says no amount of competition is appropriate in a cooperative learning environment: http://www.alfiekohn.org/article/competition-ever-appropriate-cooperative-classroom/
His latest article (which I only discovered in writing this response) discusses the practice of “cold-calling” students (calling on those without their hands raised) – http://www.alfiekohn.org/blogs/hands/ He continues to explore the issue of competition vs cooperation and how each impacts learning.
Kohn has been fighting against competition in learning for many years and I appreciate his point of view. I hope you will find it interesting as well.

I appreciate the opportunity to continue this conversation, Matthew.