I think it's fantastic that this kind of race is starting to become more and more popular. My sister does a lot of cycling and she's entered a couple of these, although she usually doesn't try to be too competitive.
She does it for the atmosphere and the camaraderie between the racers.
It seems to be rather addictive, but in a good way. It's a method of getting people to put in some daily exercise, with a kind of purpose.
I know that I find it difficult to fit in daily exercise just because it feels like there's no reason to do it. If you have a race in mind, you have a reason to go out there and get on your bike every day.