No, you're right, it's not "that fucking bad" but it is bad and it is totally unnecessary.
And, actually, as much as everyone would love to believe it, I don't believe that anyone would vote for some fics just because they're popular. What possible incentive could there be for someone doing that? Perhaps you could argue that some people only read the most popular fics and therefore don't give the not as well established fics a chance and I'd be forced to agree with you on that. But you'd be naive to think that barring people from the Awards is going to do anything to change that.
I think their line of thinking is that, "If we exclude them from one cycle of the awards, it makes the readers and voters actually read some of the fics that they didn't read, if they want to vote this time around."
I'll propose a test to see if people really are reading the other fics - we can test-drive this exclusion from the seasonal cycle business for one year.
If it turns out that during the cycle where the most popular fics have already earned an award, the voter turnout is actually lower by some appreciable degree, then we'll be reasonably certain that people are voting just for the popularity factor, and not actually bothering to read the fics that are not the ones they are already dead set on voting for.
(But just to calm you down a bit, Gastly's Mama, remember the system that I had, where I'd make a good faith effort to review all the fics that were nominated for the awards? I read all the fics in that category and yours still turned out the highest. But that was Roots, not Rival's Story.)
One more thing, I'd really appreciate it if people could stop referring to all the popular writers in the Workshop as "Legacy and Gastly's Mama" because that's simply not true and only exacerbates the problem that we already have. Constantly referring to the two of us as the best authors doesn't reflect the popularity and quality of other authors in the Workshop: What about Ryuutakeshi? TPI and SoE are the two fics in the Workshop that I would say are, without a doubt, more popular and better written than Rival's Story. What about The Noob? I'm not exactly his biggest fan as a human being but it cannot be denied that his written work is both entertaining and popular - maybe he could be huge if he ever stopped being banned for long enough. What about Kayi Rowling? Before Kisses and Two Garnets, I felt like there were two camps in the Workshop - those who liked shipping and those who did not, it feels like Kayi has really managed to bridge the gap between those warring tribes! What about Flame Haze, GIROG, Aladar, Zekurom, Lugion, AceTrainer and all the other fantastic writers on this site, including even yourself, Jabber? It seems to me that the people who say that Legacy and I dominate this site the most are the people who don't want that to be the way it is... well, do yourself a favour and stop referring to us as the cruel dictators who are somehow unfairly talented!
I'm honoured to be on that list.
I imagine that the reason we refer to you two all the time is because you two have pretty much been established as the standard of good writing here on the Bulbagarden fanfiction forums.
I'll tell you this - I don't think of you two as anything especially special - especially the cruel dictators you take us taking you out to be. You two are just two of the excellent authors on this site.