A problem that many people had with the Runestone was the fact that it played very fast-and-loose with the established lore by allowing Black Magic, White Magic and Void Magic practitioners take part without consequence. (At least during the tournament and from the folks that supervised it.) It didn't make a whole lot of sense for such a thing to be allowed on Ul'dah's doorstep, especially on a weekly basis. From what I recall, the allowance of forbidden magic existed to make the tournament more accessible to more types of characters, but ultimately it had the reverse effect as many players didn't want to be associated with it. In my opinion, I felt like allowing illegal magicks there made the concept of illegal magicks less impactful - The practitioners wouldn't feel like elusive, powerful, frightening boogeymen to me if I could bump into them strutting their stuff on a weekly basis, so generally I opted to avoid it.
I mentioned that (even though I'm basically repeating what has already been said aaaaa) because I believe that public events thrive when they're as adherent to the lore as possible with minimal stretching of it. There should be a little but of wiggle room, sure - but the majority of people should be able to happily take part without having to suspend their disbelief. It's my contention that lore-bending too much in a public event should be avoided as much as possible, as it requires far more people to adhere to the ideas of a smaller group. It makes more sense to be more moderate with how far things should be stretched when they being held in places where they can be held up to mass scrutiny. (Different groups of lore-benders have to justify their ideas to one another more than lore stringent groups would amongst themselves.)
That being said, I think people should be creative with how they write magic, provided that they can justify it somehow. Magic has some established rules in this universe and a common problem I see is that some people don't write their magic in a way that convinces other people that it has those restraints or guidelines. If you can convince somebody that you do know the lore through your roleplay and that your ideas have roots in it, then I think more people will be accepting of the idea's deviation from what is written down in black and white.
Another problem is that some potentially creative ideas seem slightly illegal within the game world. I've seen mind control, blood magic and things of that ilk during tournaments. While there might not be anywhere (that I know of) that specifically says that it's illegal within the lore, ideas that make people ask fewer questions are generally better for a big, public setting. In a smaller event people might be able to talk and justify their ideas that way, but such a thing is difficult to do in such a crowded space, I feel many are judged at face value.
I think any event that wants to build up a large and diverse audience should advertise themselves as lore-friendly, while politely asking anybody that lies outside of that zone to tone it down a little if they want to attend. It's much easier to do than the other way around, I think.