If a piece is played too much because it's an "easy 1", then move it down a grade level and make an "easy grade 2" become a "hard grade 1". If it's being played too much for any other reason, then it shouldn't be an issue. If the piece is written in a way where it makes bands sound good, then bravo to the composer. If lots of bands play it because the kids like it, then even better! Having kids excited about playing a piece is a GOOD thing!!!
Who cares if a judge hears it a bunch in a single contest. The experience is not about the judge's entertainment, it's about the kid's experience. If kids grow and enjoy being in band more because they played the piece, then we should allow it be on the list.