$60k is more than enough to encourage disclosure of full exploits
As evidenced by the Pwnium results, $60k is certainly enough to motivate researchers into disclosing full exploits, including sandbox escapes or bypasses.
There was some minor controversy on this point leading up to the competitions, culminating in this post from ZDI. The post unfortunately was a little strong in its statements including "In fact, we don't believe that even the entirety of the $105,000 we are offering would be considered an acceptable bounty", "for the $60,000 they are offering, it is incredibly unlikely that anyone will participate" and "such an exploit against Chrome will never see the light of day at CanSecWest". At least we all now have data; I don't expect ZDI to make this mistake again. Without data, it's an understandable mistake to have made.
Bad actors will find loopholes and punk you
One of the stated -- and laudable -- goals of both Pwn2Own and Pwnium is to make users safer by getting bugs fixed. As recently noted by the EFF, there are some who are not interested in getting bugs fixed. At face value, it would seem to be counterproductive for these greyhat or blackhat parties to participate.
Enter VUPEN, who somehow managed to turn up and get the best of all worlds: $60k, tons of free publicity for their dubious business model and... minimal cost. To explore the minimal cost, let's look at one of the bugs they used: a Flash bug (not Chrome as widely reported), present in Flash 11.1 but already fixed in Flash 11.2. In other words, the bug they used already had a fixed lifetime. Using such a bug enabled them to collect a large prize whilst only handing over a doomed asset in return.
Although operating within the rules, their entry did not do much to advance user security and safety -- the bug fix was already in the pipeline to users. They did however punk $60k out of Pwn2Own and turned the whole contest into a VUPEN marketing spree.
At the last minute at Pwn2Own, contestants Vincenzo and Willem swooped in with a Firefox exploit to collect a $30k second place prize. The timing suggests that they were waiting to see if their single 0-day would net them a prize or not. It did. We'll never know what they would have done if the $30k reward was already sewn up by someone else, but one possibility is a non-disclosure -- which wouldn't help make anyone safer.
Fixing future contests
The data collected suggests some possible structure to future contests to ensure they bring maximal benefit to user safety:
- Require full exploits, including sandbox escapes or bypasses.
- Do not pay out for bugs already fixed in development releases or repositories.
- Have a fixed reward value per exploit.