I promised somebody I wouldn't reply any more because it won't get me anywhere but ah well.
Just because it happens all the time doesn't mean it isn't wrong. In fact a lot of companies also manage to open their competitions up to everybody.
You seem to be focused on the law of the whole thing which is absolutely irrelevant to the discussion at hand. It's all about being excluded from taking part which they can easily allow us to do if they change the prizes to something that everybody can receive (in game items, for example) or simply make the prizes US only. Restricting taking part in the competition is a totally unnecessary action resulting in unfairness. We only want to take part.
Another game, which I won't shut up about right now because I'm excited about it, is running a competition during it's Beta stages which will reward the winners with both in game items and a fancy new graphics card. The shocking thing is if a none-US player wins the competition they simply don't get the card but will still get the in game items. You see how that works? We still get to take part in the competition, the fun is still to be had.
That's why we feel second class, that why it's unfair. It's an easy thing to solve why is it not like this now? I don't know.
Edit: Anyway, I was just venting anger and really it's misplaced so let's just let this discussion die because we're never going to agree and let the Americans discuss the actual competition and not the controversy.