1. Because it shows you succeeded in a driven project; and, as bluehat said, bluehat's hired people based on that.
2. Participating in hackathons is an easy, passive way to participate. It also doesn't leave the opportunity to fail as easily. If you mess up or get bored of the hackathon, you just stop. You're not screwing over a client-base. If this is your first project like this, you can even use it as a litmus test of whether you want to keep doing this type of thing, or not.
3. A common goal. There's an idea that maybe you hadn't thought about before; and now you, and your friends, can focus on this goal. Also, you, your friends, and several other people who found an interest, can all work on developing a new thing. It'll probably be more innovators than a normal team that would be designing the new machine.
4. True, but it's still nice incentive. TopCoder contests have prizes for the best contestants, too; and some of those are especially sponsored in much the same way.
5. You never know a good idea until you see it executed; and... so? Some people are freely willing to do that.
6. You, the company, are getting feedback from the community by some of the people in the community making a version of the product that handles some of their problems with the current models
7. Maybe, maybe not. I'm not Coca Cola. They /could/ use it for scouting, even if they don't.
2. Participating in hackathons is an easy, passive way to participate. It also doesn't leave the opportunity to fail as easily. If you mess up or get bored of the hackathon, you just stop. You're not screwing over a client-base. If this is your first project like this, you can even use it as a litmus test of whether you want to keep doing this type of thing, or not.
3. A common goal. There's an idea that maybe you hadn't thought about before; and now you, and your friends, can focus on this goal. Also, you, your friends, and several other people who found an interest, can all work on developing a new thing. It'll probably be more innovators than a normal team that would be designing the new machine.
4. True, but it's still nice incentive. TopCoder contests have prizes for the best contestants, too; and some of those are especially sponsored in much the same way.
5. You never know a good idea until you see it executed; and... so? Some people are freely willing to do that.
6. You, the company, are getting feedback from the community by some of the people in the community making a version of the product that handles some of their problems with the current models
7. Maybe, maybe not. I'm not Coca Cola. They /could/ use it for scouting, even if they don't.