This issue certainly divides the graphic industry. However, it also divides my opinion of it - that is to say I am of two minds on this one. I agree wholly with both points of view.
Free pitching sounds like one good way a starting graphic designer can get his/her stuff out there with the novelty of possibly winning something. And for a starting designer, making money is still a novelty. It's still exciting. So a competition is a great doorway into the industry.
The trade-off, of course, is the notion that the competition organisers are taking unfair advantage of these rookies. Though if you don't begrudge the organisers of their sweet little hustle/scam, you can see that on the level of a newbie designer, its just like any exciting competition only this time practicing their design profession.
AGDA is still right though, about most of a fair-pitching career is a waste of time - but not for newbies, only for design veterans. I do see that a career built on competitions can be frivolous. And these competition organisers are easily seen as shifty grifters taking honest commission work away from professional designers. Yes, AGDA is just scared.
So I believe free-pitching is a valid and fair thing for practicing lightweight designers to begin in the industry, but if I was a professional established designer I definitely would not base a career on it.