Celebration of excellence, yes. Just not personal excellence. The ancient Olympic games were already used as a political tool to assert dominance among Greek city-states. One of the points of the games since ancient Greece has been for the winning city-state to say “look, I can train my soldiers to be this good. You don’t want to mess with me.”
I think one possible explanation is that this is a weird side effect of the modern games being heavily commercialized. If athletes just quit without a fight, spectators won’t like it and tickets won’t sell.
Wait so is it a celebration of excellence or a just a commercial thing where the goal is simply to drive ticket sales? Because what you described was people putting on a show but ultimately acting out a script, like pro wrestling.