Do you have any idea how torturous it is to judge a contest submission littered with incorrect punctuation? One or two misplaced commas are no big thing, but too many and the story is lost in a sea of run-on sentences that make no sense.
Many RWA chapter-sponsored contests don’t take off points for improper formatting. Every one of them should. It would make it easier for their judges to base their scores on only the quality of the story. All contestants hope to final so their ms will be read by the final judge–usually an agent or editor. Imagine the final judge has two manuscripts, but only one can be the winner. Both stories are equally compelling, but one is formatted correctly and all punctuation is perfect. The other drove him/her insane with errors. Which will the A/E choose?