I would say painting should never be a requirement but should always be highly, highly encouraged. Some people will either just never have the time, be very self concious of their ability or lack thereof to paint, 3 kids and a wife (I'm there, but I still squeeze out time here and there), and some are just interested in the gaming aspect of it.
For those reasons, someone shouldn't be refused a tourney because of that, but should have no shot at becoming the overall winner without it.
But I do agree, it's a travesty when a company doesn't try to steer it's players into the complete hobby aspect.