In the past year, I've come to see official competition to be the death of football. Perhaps that was heavily biased on the dull and cynical play we saw in WC 2010. But to see players go for creative chances, to run as fast as they can against the best in the world and not have to worry about playing the full 90 minutes, etc. -- some friendly matches in the past year have turned my usual thinking (mostly like yours) on its head.
Competition does not breed better football. At least that's my conclusion from 2010-11.