Tournaments have a number of baked-in issues it takes a great deal of effort and no small amount of luck to avoid.

One thing I've tried myself in the past, and seen done (very) occasionally elsewhere, is less a "let's you and him fight" conventional tournament and more of an exhibition game (NOT THAT KIND OF EXHIBITION DX).  Set a challenge, everyone gets one post to put forth their best effort at meeting the challenge, the judges grade the results, move on to the next challenge in the event.  Whoever gets the best overall grading by the end of the event wins.  The competition isn't quite so direct so players tend to be less assholish towards their opponents/fellow competitors, it plays [i]much[/i] nicer with higher-powered characters, and you can do some fun stuff with the challenges, stretch playin' muscles most straight punch-ups don't really touch on.  That and since it's a one-post-per-entrant dealie, it goes wildly off-schedule much less often.

I like those a lot, though they're in the definite minority compared to typical punch-ups.  'Course, recent experience shows that the punch-ups really are [i]way[/i] too prone to issues to be reliable.  Urgh.