Good analogy, and while I love both fiction and non-fiction, this contest is definitely meant to be fiction. It's meant as a fun little contest that anyone can enter, and where people can fully unleash their creativity, without being limited by what they can afford on Neopets. This levels the playing field, so new players have just as much of a chance of winning as users with access to tons op NP (and NC).
(I think what you're describing is more like the customisation contest on Neopets itself, except for the fact that that one doesn't have a theme.)
In addition to levelling the playing field, I doubt we'd get enough entries to actually have a contest. Considering the average amount of entries per round is about six right now (when entering is quite easy), having to put a lot more time and effort into an entry (hunting down items, spending NP/NC, painting or morphing their pets), would probably put people off. Also, the entering period might have to be extended (even further), and I'd wager that not many people would be willing/able to go through all of this every round. (If they'd be willing to spend NP/NC, and paint/morph their own pets in the first place, that is.)
I know I personally never would've bothered entering (before I ran the contest) if that was how it had been set up. When it comes to playing Neopets, I'm a "doing my dailies and maybe some plots/events" kinda player. (And even my dailies have dwindled down to collecting interest & Trudy's these days. ) I can't even remember when I last changed the looks of my own pets; the customisation function on Neo has always been suuuuuper slow for me, so it's always felt like a chore, whereas DTI feels like a fun tool to play around with. (I actually ended up getting a few pets based on entries I sent in, after playing around with all the options for these pets on DTI, and then falling in love with them.)
I can assure you that people pour their personalities in their entries though. Having received so many of them by people who regularly enter, I can often tell who sent in which entry, without checking their username. People really have very distinct styles and interests, which are reflected in their entries.
But yeah, all that to say, if you prefer a 'non-fiction' kind of contest, The Runway might not be the kind of contest for you. (Unless everybody is going to disagree with me now, in which case I'd happily try a round (or more) for which everybody would have to use their own pets/items.)