I think this sounds like a really interesting idea, what do other people think?
Just a caveat or so.
As a text repository, Wikisource functions as a library and archive, and I suppose that is how people mostly think of it. That doesn't really describe its full scope: you'll find individual poems, journal articles, encyclopedia articles, which in a sense is an even better use (really useful to able to link to the precise text you want, compared to say linking to the Internet Archive or Google Books).
The way this translates into proofreading is that people's initial idea is, for example, going through a Victorian novel and picking up typos, with spellchecker support. That is Gutenberg-like and perfectly fine, and it is what Gutenberg does well. There are texts that are much harder to proofread, even opposite a scan: e.g. reference material.
So proofreading contests that munge all proofing together are basically going to favour the more readable prose. I have no real problem with that, but the issue is worth a little thought.
It's a low-hanging fruit situation, in brief. It would be welcome if that were reflected in the judging.