I feel the post. For me AI has ruined both, playing CTFs and also building CTFs challenges. The most annoying thing to me is the "yeah idk but here is the flag" mentality.
Before when playing CTFs with my mates was usually sitting there for hours tackling a challenge until some other mate joined, had some look together and solved it with you together in 30 minutes which is the most rewarding learning experience. Nowadays mate joins in throws the clanker on it and solved it in 5 minntes. Asking on how it worked you always get the "yeah idk what it did, but who cares, here is the flag" response.
Same for creating challenges. Whenever I ask for writeups or if some people solved it differently I usually get the "yeah idk, clanker solved that one" response taking the fun out of it.
So yep, this CTF format is definitely dead. Mainly because the strong competitiveness and prices. This encourages people to cheese challenges and sometimes solving them differently was fine as you still had a creative out-of-the-box thinking moment, but nowadays with AI there is no brainpower needed, no cheesing needed, no human needed. As you mentioned, it's pay to win.
My two cents is that the 24/7 CTFs will get more attraction as the scoreboard doesn't matter there and simply doesn't give you any price.
I don’t know like chess engines didn’t kill chess. You could just play with people that don’t use the “engine”
Yea, but chess adapted to it and is restricting use of engines. When you play a tournament you are banned from using a phone and will be disqualified if you do so. Online tournaments don't have a prize money for that reason, so there is no real benefit for cheating. Lichess and chess.com additionally add rankings for bots and have a strict anticheat if you use bots for regular games.
For me it feels like this is not really possible for live CTFs. In contrast to chess you can't ban AI, as live CTFs are about breaking things by design, so they'll always try to circumvent an AI ban.