Good question, which we're actually constantly discussing.
The reason (so far) is that LEGO is our main (and sole) aim with this site and thus using just that for contests is common sense.
The reason we allow custom parts is that they offer what TLG hasn't produced.
I am aware that so does megablocks and other companies, but we like to think there's a difference between TLG's competition and private customizers.
I'd like to elaborate on this when I am not at work