If you are a good designer, this will work.

I bought a design on 99designs. Had a great experience with the designer, who I recommended to my friends, and now she is getting loads of work.

I'd say that's truly meritocratic <- a good thing.

The "designer" gets a little bit of scratch and exposure they never would have gotten otherwise. The "client" gets a design that meets their budget, and which is likely to be much better than what a professional designer would do for the same price. Who's losing out here?