You have just articulated an important element that is missing from cities’ use of design competitions to crowd source problem solving, which I wrote about in a recent blog post, http://nwhysel.blogspot.com/2011/08/this-roadmap-could-use-gps.html. I refer to it as an app gap, which is the gap between the goals of the city to reduce the cost of providing services to its citizenry and the goals of the developer to garner VC interest, and a second gap within the city itself, between providing needed services and showing off local talent to attract employers to relocate here.

Without an analysis of needs and limitations of citizens by people in city government, we end up with yet another restaurant locator (last year we had a bunch) or inadequate delivery mechanism and content that does not address the needs of at-risk communities (eg., health Dept condom locator app – iOS only, first of all, but, secondly, maybe why is more important than where)

Radar.oreilly.com did a good analysis of this the other day too.