Luckily VIP judges aren't all that common around here, but I agree they should be a deal breaker. All of the other rules are incredibly enforced, I don't see why that should be any different. I always thought it would be much easier (and better for the competition) if the contest rep just found a few teams that would make an extra box for the VIP judges table that wouldn't be scored. At least not in the same contest as the rest of the teams.
I wish around here there was enough organization for the teams to make a statement like that. In my town of 12,ooo people there are 4 teams that regularly compete, plus another 3 or 4 groups that will occasionally put a team together. Even if we tried to boycott those contests with the VIP judges, there would be a line of teams who just didn't care...