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My somewhat cynical view is that, what competitions for horses and violinists have in common is that the purpose of both is to generate money for someone - in the case of the horse for its owner and backers, and in the case of the violinist to help ensure a successful career. The big difference is that the horse has no say in the matter, whereas the human has a choice whether to compete or not (possibly not quite true for those of a young age - pressures from adult sources can come into the picture).

Having said that, for the violinist today, competition is really the only feasible way to identify those who are capable of getting to the top and staying there. In the competition hall there is a replication at an increased level of the pressures of a concert in real life, but where errors are instantly noticed and not forgiven. A player who is special enough to survive that ordeal is likely to be ready for a good career on the concert platform.

Competitions are for horses, athletes and violinists. But an athlete or a horse go faster when they use doping, so also violinists must be tested. I do not mean out of competitioncontrols, but also violinists must cope with stress and nerves and cannot use beta blockers or sedative just before the competition.
That is also forbidden for archery on the Olympic Games and sure these guys are tested because they also can tremble with their bow:

I do not think this violinist was clean while playing this:

I used to believe the truth of that quote very strongly. I've moderated my view somewhat in recent years, especially after having gotten involved in the Young Artists' Competition that is run by the community orchestra I play in. I was a judge for that competition a couple of years ago and I was involved with choosing judges and organizing the overall competition this year. I have come away from that experience thinking it was worthwhile and useful for everyone. The young artists were wonderful, it gives them a goal, performance experience, a little money, and something to put on their resume. It gives the audience, the orchestra, and the community something special; an event to gather around and be excited about, and a chance to see and meet musicians they might not otherwise have the opportunity to see.

But I feel about music competitions rather similarly to how I feel about sports competitions: that it's better if they not become too big, and it's better if it doesn't involve big money, corporate sponsors, TV contracts, and the like. I think money has ruined professional and college sports with greed, corruption, and an overemphasis on winning; and the Olympics aren't far behind. I hate the same trends when I see them in music.

My father entered me for the North London (local) and London (i.e., citywide Music Festivals when I was a child. I tended to win the "coveted" Silver Medal in the local ones, but most often had to make do with a bronze in the citywide ones. Dad would then cultivate the winners, one of whom remained a friend throughout my childhood and early to mid teens, and another of whom reappeared to perform the slow movement of the Sinfonia Concertante with me and a youth orchestra in early adulthood (and his violin playing was beautiful). So yes, I think that, whether or not they were beneficial to me per se, they were certainly beneficial in terms of finding friends.
We had competitions at the senior school I was at, and I remained friends with the visiting American violinist with whom I tied one year (I think the adjudicator was persuaded to let me tie with him - I played the first movement of the Elgar 'Cello, Tertis arrangement, and he played the slow movement of a Wieniawski), and also the schoolmates I beat. In my first two or three years we represented our houses in the house music competition (after that we just represented ourselves, and separate cups, gifted to the school by Francis Steiner's father, were awarded for strings, piano, wind and brass. "Just as well", because however wonderful a player I may have thought I was, I would always have come behind John Tavener and Francis Steiner) and I came third, behind older boys. I don't think these competitions did us any harm.
Nobody's forcing anyone to enter competitions. Stay home if you don't like them.
Competitions for horses or athletes for 800 meter have in common that the first one wins. Sometimes you need a photofinish, but than you can see who is the winner and who is second after 0.001 or 0.01 seconds.
Competitions for gymnastics, ice dancing have a jury who give points. Even with weightlifting you have a jury to judge whether the lift is a good lift without afterpressing.
Violin competitions are more like ice dancing or gymnastics with a jury who give points. After the competition you can still discuss whether the winner is also the best. You never have a hard winner like horseracing or athletics with a photofinish and the fastest time.
Perhaps you can make a competition who can play for example bumblebee or Novacek for violinists as fast as possible. Than you have a hard winner when someone misses no note and can play it in the fastest time like David Garrett

In my experience and that of my peers competitions are not fun. Formal performances and informal playing with others are FAR more enjoyable. As Jennifer Koh put it, "Music is not about competitions — it’s about passion and loving what you do."

In contrast to a horse race where a nose is observed to cross the finish line first, the outcomes of music competitions are subject to a wide variety of influences and differences of opinion, often leading to controversy.

A quick review of recent online articles provided interesting insight into aspects of the contest game. Some references are included below, with the most recent listed first.

Competition Judging: Keeping Evil Out of the Jury Room
Musical America Worldwide - Feb. 3, 2015

Confessions of a Seasoned Jurist
Musical America Worldwide - Feb. 3, 2015

International Boris Goldstein Violin Competition responds to criticism
The Strad - Feb. 2, 2015

The outcome of the Indianapolis was not a scandal, but the reaction to it might be
Violinist.com - Sept. 24, 2014

Miriam Fried to Step Down from Indianapolis Jury Voting Over Student/Teacher Furor
The Violin Channel - September 20, 2014

Shock and Dismay as International Violin Competition Suspends Finals Videos
SlippedDisc - Nov. 6, 2013

Do violin competitions face extinction?
The Strad - Aug. 22, 2013

Does success in music competitions really matter?
The Strad - August 21, 2013
Part 1
Part 2

Study suggests that judgement of music competitions is led more by sight than sound
The Strad - August 21, 2013

Top Five Competition Controversies
WQXR - May 4, 2012

Scandal at Tchaikovsky
The Moscow Times - July 4, 1998

Musical Tradition of Acrimony
International New York Times - July 2, 1994

In Moscow, Survival Amid The Music Contestants In The Famous Tchaikovsky Competition
Philly.com - Dec. 28, 1990

I love watching competitions, and many do benefit from playing in them. The main problem I have with competitions is how they are judged, and who does the judging. Competitions where jury members or organizers have students competing are very suspect. This is something that can ruin careers. A good documentary to watch is "The Winners" which is about past winners of the Queen Elizabeth competition.