Here’s the thing about that. It’s like an auction.
In an auction, everyone in the room has an idea in their head what an item’s worth. A big chunk of people undervalue it. Some people overvalue it. The only person in the room who wins is the person who overvalues it the most. From an economic standpoint, that means you can only lose an auction: by definition you can only obtain the item by paying too much for it.
That’s this leaderboard. A big chunk of the game’s figured out what the various prizes are worth. These people think it’s worth more. And because they think it’s worth more, they get to compete with each other by paying even more money just to prove they think it’s worth even more than the other guy.
Now, valuation can be subjective. There are some things that hold more than monetary value. That’s one good reason to overpay in an auction.
In this case, we’re probably talking about “holding a week-long position on a leaderboard in a game a few thousand people play” vs. “buying about 3 games with 50+ hours of content”. That’s a really unhealthy valuation.