I enlisted, applied, was accepted into USAFA Prep and finally the AFA. It is a long road.
It is competitive, but if you are stationed in a unit with support and have a good Academy Liaison Officer then they will do everything they can to make your package be the best it can be. It is not as competitive when it comes to academics (GPA, SATs etc) but VERY competitive when it comes to your performance as an Airman. A lot of the accepted applicants in my class were Airman of the Year in higher tiers of the AF.
The requirements that I've heard of state that you must have at least a year at your permanent duty station before you can be accepted. This is FALSE. I know quite a few who came straight out of enlisted tech school to the Academy. Keep in mind though, depending on where you start your application will freeze your base assignment process. Personnel issues you a code which prohibits you from deploying, going on temporary duty or having a permanent change of station to include your first duty station assignment out of tech school. It could also stall follow on training after tech school if that training requires you to go on temporary duty to a different base. Long story short, the application could cripple the beginning of your enlisted career and if you are not accepted then you'll find yourself far behind the curve for new airman in your unit. It's definitely not impossible to recover from this, it just takes time.
Historically there have not been enough applicants to fill all of the slots dedicated to airmen. BUT! These slots are discretionary for the admissions office. Just because they have open slots does not mean that if you qualify you will be accepted. Direct entry prior enlisted slots were the first to be cut when the class of 2016 needed to reduce it's numbers.
Also, if you are applying from the enlisted side and are accepted to the program you are almost guaranteed to spend a year at USAFAPS unless you are about to turn 23 years of age.
You CAN start the process on your own. This usually begins with a face to face meeting with your commander to obtain his endorsement (in place of a congressional nomination). After that it is the exact same application process as the direct entry route. Note that if you are accepted to the Prep School then your commander's endorsement is void and you must obtain a congressional nomination to be eligible for appointment the following year. I have more info on that if you are interested.
Is it bad to enlist with the intention of applying? No.
Is it bad to enlist with your heart set on getting into the Academy? Yes. Always have a back up plan. Sign an enlistment contract for a job that you know you would be okay working in the event that you are not accepted. Explore other commissioning options. Enlisted troops have a few programs that send Airman to ROTC detachments at civilian colleges.
Be prepared for a rough few years of your life. Enlisted BMT is no laughing matter, neither is tech school (depends on where you go) or proving you are a high caliber person who deserves a shot at the AFA. You will do basic training again (BCT) at the AFA and Prep School BMT if that's where you end up first. You will experience the full fourth class year indoctrination despite whatever experience you have in the real world or the operational Air Force.
If you have any other questions just shoot me a PM.