I'll just chine in on this because I had a conversation with Wayne Lohman about this very issue this year. The specific reason he gave me was that the not-for-profit status of the KCBS would be affected by requiring membership to compete. I asked him about discounts for KCBS members, and he said that it was an idea being considered. I've seen a few comps that do this, and The National BBQ Cup this weekend is doing it too. The "Open" nature of requiring membership was not brought up (That doesn't make it untrue) but personally I don't see it as an issue. Non-member teams would not be excluded from competing as KCBS membership itself is open. That's just my take on it. IANAL.
I'm not running for the BOD, but my personal opionion for those who are and may get on there, I don't think it would be a bad thing to give a discount to KCBS members for a KCBS sanctioned event. I see all sides of the argument, and have even said that people shouldn't become members "just because." I agree that the sanctioning, as a service, is paid for by entry fees, but that doesn't mean it wouldn't be helpful to have more cook members. Years ago I competed in a Chilli cookoff, and they had a similar system in place where members got cheaper entrance fees. I remember thinking it was a mild pain, but it didn't really change our mind. We chose not to join as it was our only event and cheaper that way. Others might do the same with KCBS.
Another option I've been considering: Judges aren't required to be members, but organizers require them to "apply" and often give first priority to members, right? Why not take a similar approach with teams? If your team is not a "member team" and you submit an application, you go on a wait list and are only allowed to compete if the comp doesn't fill up with members by 28 days before the event. Does that sound reasonable? Teams can always pay the $35 to join and be guarenteed if they want, though this may affect the "open" nature as well.