I've been to a lot of quilt shows, and I've entered my quilts in a lot of them. In the cases where a "nationally known" quilter won, I have never once been tempted to say the quilter won because of their name. The quilt was simply the best in the category.
As for professionals entering in local shows, it depends on the rules of the show. Personally, I think it would be crazy to restrict the pros from entering because it's one way of attracting people to the show. Instead of discouraging the non-pro, they should feel proud to compete against them - who knows, a non-pro might actually win, and the win would be all the sweeter for having beaten "the best."
Janet