On the Brawl side of things
UTDZac has been doing this for about a year I believe. I think his system is simpler, involving a tio plug in- so if you have the tio bracket you can send it and it should automatically update results. Not 100% positive on this though. If it isn't the case, it should eventually be, in order to make it easier to enter results in.
That's not true at all. I believe chess is very inviting to weaker players because of how they use their ratings system. The ratings system is more than just seeing how you stack up. It's a great tool for allowing amateurs to play people at their own level, it removes bias towards good players in tournaments (this is a big turn-off to me), and it gives everyone something to work for. You know those 95% of players who never have any shot at prize money? And are just entering to try and get more experienced? Well now there's something real for them to play for.
Typically chess tournaments are divided though into several (typically 3 at smaller events, many more at larger events) divisions, where you are separated away from your opponents based on your elo rank. The top division involving the highest rated players has the most amount of money on the line, but even the lower division, populated with low rated players, has a fair sum on the line. I doubt this is something that would fly with the top players in this community. For example, the 2011 US Open Chess Championship had this distribution:
Prizes[Projected]
Top Places: $8000-4000-2000-1500-1000-800-600-500. Clear winner - $200 bonus.
If tie for first, top two on tiebreak play speed game [W - 5 min, B - 3 min and draw odds] for bonus and title.
Class Prizes:
Top Master: $2500-1200-800-500.
Top Expert: $2500-1200-800-500.
Class A: $2500-1200-800-500.
Class B: $2500-1200-800-500.
Class C: $2000-1000-600-400.
Class D: $1500-700-500-300.
Class E & Below: $1500-700-500-300.
Unrated: $800-400-200.
That would mean a Class A who might not even place in the money, would likely have won a Class D/C/possibly B event, but he was not allowed to enter at those levels due to his rating. Due to the general selfishness of the top players in the Smash community, along with years of precedent, I find it unlikely they would ever accept such a system that spread the wealth to lesser players. Then again, I have noticed a recent rise of AM brackets in the last 6 months.