I agree and have openly expressed this opinion with others involved in the event and through the Linkshells and other organizations I've been a part of.
The Grindstone is a great event for combat RPers and spectators alike to come and enjoy. I'd hate to see it lose that charm over giant prize pools. Perhaps as Otto suggested, there is another way in which an event that encourages say, betting on combatants or what not? Could incorporate the things Kage has mentioned, shady dealing, perhaps rigging matches here and there?
It sounds like it could be fun and perhaps a little darker, but in my opinion keep it out of an already long time successful event! Make another for it, hell we can always use more events right?
Just my 5 cents.
Edit: And Otto I know you mean well and yes you have openly expressed multiple times that if anytime anyone wants it to stop just say so. Not calling you out at all <3