As a festival organizer and an 'award winning documentary maker' I agree, some festivals (and thus their awards) have more status than others. But so do Universities and sport events. You can be a winner of the swim competition at your highschool. That is not the same as an Olympic winner. But you are still a winner.
An award often is a marketing tool for filmmakers to get attention for their (next) film. They can use some help because most of the time there is no marketing budget left after they finished their work.
Another question you can ask is whether films should be original.
The film 'Mossad' is a competitor in my little festival for best comedy feature, the director is a fan of 'the naked gun series'. The naked Gun series is a parody. Does that make the films fraudulent because the idea isn't original? I think not.

An award often is a marketing tool for filmmakers to get attention for their (next) film. They can use some help because most of the time there is no marketing budget left after they finished their work.
Another question you can ask is whether films should be original.
The film 'Mossad' is a competitor in my little festival for best comedy feature, the director is a fan of 'the naked gun series'. The naked Gun series is a parody. Does that make the films fraudulent because the idea isn't original? I think not.
