I see a lot of comments speculating that there may be something wrong with programming competition winners, but this result might be a statistical curiousity unique to Google. It's possible that for most companies, good at programming competitions could still be positively correlated with job performance. For example, what if most people whom Google hires could have won some programming competitions if they had wanted to (a situation that most other companies are probably not in)? In this case, 'won programming competitions' could be data that is a lousy filter for Google, yet a good filter for other companies.
Good point, in essence it sounds like one theory people have is that competition winners have over-specialized, but your theory is that there could be floor effects in the range of ability at Google (i.e. the floor is high, many people at Google could win competitions).
