If adults or teenagers would like to do it, then alright. Though I don't agree on judging people on their looks, it can make people very, very overly confident, thinking that looking beautiful [paving slabs of makeup and an orange tan??] and winning is all that ever mattered. I've never heard of a natural pageant but that sounds much better. I imagine that children would think they weren't good enough or pretty enough if they did not win the first prize in their talent. A lot of children don't actually like doing it either - their parents pushed them into this because they are hungry for success and will not give their kid a chance to run around and play like a normal girl/boy.
I really don't think that you need a trophy, glittery dresses, tan and make up to be considered beautiful.