I'm fine with a painting-only competition. Many people enjoyed looking at the competition models at Adepticon last year, and imo, it's all about the models. I don't care who painted it or why they painted it. I'm just happy to see the world-class models on display.
If you want a painting competition for hobbyists, there are tons of smaller competitions or tournaments with all-around scores. Most local tournaments around here have a prize for best painted army or best painted model, and it's only hobbyists who enter. For a huge event like Adepticon, it's not surprising that you'd have a lot of people who only paint.
Actually, I saw a lot of this last year at Adepticon. >.> It's not like people check for photo ID before they play.(and impossible to have a surrogate player)