I'm going to have to disagree with you there - I'm pretty into the fandom too, but I don't usually go to LiveJournal for all my needs. Sure, maybe a lot or some of it is based on LJ, but I can think of a bunch of more website websites that can put up banners.
The thing about fanfic and graphics is not everyone has graphic abilities/access or time to write a fanfic/may not consider themselves the best of writers. I think this is a pretty fair way to do it so anyone can enter, but you just have to think outisde of the box if you will...