Here's a link to the published paper http://www.nature.com/nbt/journal/v31/n2/full/nbt.2495.html Because it's behind a pay wall, let me summarize:
1) Some problems in biology require computation.
2) Computation requires algorithms.
3) Algorithms need to be developed.
4) Software development is expensive.
5) Offering a prize through TopCoder allowed the authors (one of whom is the CTO of TopCoder) to buy 2,684 h of software development time for a mere $6,000.
6) That development time resulted in a good product.