Programming Contests - Worthwhile for Real Life?

Ustaad asks: "We are running some sort of a club in our University which has members who are interested in programming and related stuff. With many sites like TopCoder and Valladolid Online Judge providing heavy machinery practice equipments to programmers, the level of competition in programming contests like ACM ICPC have gone really high. However, we are finding it really difficult to motivate new entries to join our club. There are few key questions that we face from our members. Firstly, how important are these programming contest techniques for solving the real-world industrial problems? Secondly, Do employers really care about the achievements in programming contests while recruiting? And thirdly, what other advantages does one gain by venturing into these contests?"