Just to stress, these are my personal feelings. I have nothing but respect for the huge amounts of effort people put into running awards (well, as long as they take the time to talk to the people whose fics are nominated -- I really don't know what to do about my recent discovery of dwtwslashawards, which I apparently won something in despite never being told I was even nominated; frankly I've been ignoring it and hoping it'll go away). I have no problem with anyone who does get involved, and I wish people nominated every success. But if you nominate my fics (and I've had three emails concerning two different awards since the start of the year, so somebody out there is) then I'm afraid I'll decline.
The arguments in favour of awards that I can see are that they provide recognition for authors, and help readers find good fic. That's all great, and I'm sure they do (I won't deny that I got egoboo off the nomination emails). But as far as I'm concerned, feedback and recs work perfectly well for those functions without any of the drawbacks.