I like the idea.
Similar to the 8-bit game making competitions.
A lot of the 8-bit platforms are getting some excellent tools these days - C compilers to mask the painful bits of assembly, emulation assemblers (WinAPE, etc), map editors, game development libraries, and so on. Lots of new games coming out because of them.
Certainly I wouldn't ban Amos or Blitz Basic II from the competition. Ideas and gameplay matter a lot. If an idea is looking good but more power is needed, the developer might have the impetus to switch to assembler.
What's a good Amiga C development environment - preferably with a game development API bundled - think of the functions that Blitz Basic II offered, but in C, with inline assembly allowed.