Competitiveness has nothing to do with principal nominations. They are totally at the discretion of the MOC. FWIW: Most MOC's don't use the principal method.
If you're curious, the MOC has 3 methods s/he can use when presenting their slate of nominees.
1. Principal method: They tell the academy who their #1 nominee is. The academy MUST give them an appointment if they are qualified. The other 9 names on the slate are just 9 names. Usually alphabetical, but no significance. The academy uses those 9 in filling slots if available.
2. Ranked method: Similar to Principal, but ALL 10 names are ranked. #1 is the principal and the other 9 are ranked in order. If #1 is qualified, then they get the appointment. If they aren't, for whatever reason, then #2 gets it and so on down the list. After the one is given the guaranteed slot the academy does with the other 9 as they see fit in filling other vacancies.
3. The 3rd method is the most common. The MOC simply gives the academy a list of 10 names. No priority or significance in the nominees. Usually ranked in alphabetical order, but the order means absolutely nothing. The MOC is allowing the academy to choose the person they want to receive the appointment. It's done based on the highest score. Whichever of the 10 has the highest composite score gets the appointment. The other 9, just like in the other 2 methods, go into the national pool and the academy offers appointments to fill vacancies.
While most MOC's use the 3rd method I mentioned, many are starting to have second thoughts and some more are starting to rank or at least give a principal nomination. Reason being, there's been some appointees who had an early appointment with a presidential or other nomination and the MOC believed they were going to get that person plus their nominees. But the academy has the option of changing which nomination is assigned to an appointee so long as the one who is suppose to receive an appointment does. Well, it is not uncommon for an appointee with a presidential to have that changed to the MOC's nomination and the Presidential went to someone else in the country. So that's one less appointee in a district or state. Many MOC's are catching on to this.
Matter of fact, when my son received his appointment, it was with a presidential nomination and he received his appointment at the end of October; beginning of November. I had him call the MOC's and tell them that his received an appointment and TO NOT NOMINATE HIM. This way the MOC's could get another one for their state. That worked great that year, but the MOC didn't remember the next year, and in the class of 2013, the same thing happened with an early presidential nomination/appointment. But the MOCs still interviewed and nominated the young man. When appointments were finalized, the academy took the presidential away and gave it to someone else and made the young man use one of the MOC's nominations.
Some think the academy should have total say so in who receives an appointment. I don't. I believe that it is the MOC's "RESPONSIBILITY" and duty as the duly elected representative/senator of that state/district, and they should be the one who chooses the appointment for their district/state. "Assuming the individual is qualified". Even if every MOC did this, there would still be more than 1/3 of the class that the academy gets to fill at their discretion. They don't need to have all the say so.
Anyway; I went way beyond your question. There's 3 methods; the MOC decides which method; and it has absolutely nothing to do with how competitive or not your district is. It's whether or not the MOC wants to give a principal, ranked, or open slate.
