A judge's perception of merit is largely a product of her taste. Liking one poem by a given poet makes it probable she will like others. Another judge will favor a different poet's poems. True merit comes into play (if the judge has skill, she won't choose a bad poem), but so does luck. Making the judge choose a poem by a different poet for each prize puts each entrant slightly less at the mercy of this luck.
It seems a reasonable rule to me--but others' taste in rules will differ.
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