I dislike this idea as well. Giving prizes a direct monetary value will, obviously, attract the types of players who are interested in them. While this is not bad in and of itself, many such players are concerned only with winning, the pleasure of playing being secondary or even irrelevant to their purpose in participating in the event. Such players will tend to build whatever seems to be dominating the environment, rather than something new that is both fun and interesting. On the other hand, if the prizes awarded are aesthetic in nature (such as tokens, alternate art cards, etc.), or there is no prize at all, then the focus is purely on the competition itself, and there is no particular incentive to play decks that lack innovation, or simply aren't fun for opponents to play against.
This is why I will always only play Magic in the casual sphere. My goal is to have fun, and if I can only have fun if I'm winning, I probably shouldn't be playing the game, lest I run the risk of no-fun nights in which I don't win at all.
From my experiences with AGoT, prize or no prize, certain players will net-deck or play decks prone to NPE while others just won't. I've never seen a strict direct causation in any of the many games I play. Some people just like competition, and part of that is bringing what they think gives them the best shot at winning.
Cash prizes, however, do demand a more formal system of judges then FFG tends to keep around. I don't think the game will support that type of tournament