User blog comment:Omega natsu2/Episode 176: The Dragon King, Review./@comment-71.230.108.206-20140406054937/@comment-7418318-20140406181721

But on the other hand, if the good guy always win, there victories lose their meaning and the story loses the thrill, so a setback every once in a while is almost a necessity for a very long running series.

That also why Fairy Tail lost on the first day. If they had won every competition from beginning to end, there would be no suspense and it'd just be boring.

And considering how terrible the situation of the guild had become while the Tenrou Team was missing, even a 2nd place would have been a resounding victory. From alway last to 2nd out of 113 is a massive jump.