That doesn't really say much about their skill. All Norvig says is that people who are good at competitive programming are used to quickly solving problems and move around, and that probably isn't good when it comes to real world engineering. I don't think that attests to their quality in writing code, more about the environment they are used to working in. If there actually was a net loss in hiring such candidates, the major companies would stop using that as the filtering criteria to begin with.