ATSSB guy here...

I'm going to have to somewhat disagree with you on this one. An audition is just that...an audition. We don't call it an all-region "chair test" or "assessment". The purpose of the event is to select students for the region band. Words have meanings. When you audition for something, you are demonstrating your preparedness and suitability for the role for which you are auditioning. Students should be prepared for it.

Regarding the sunk time cost...that point may fly in some regions, but other regions cover hundreds of miles. My region has had auditions that began at 10am and, even with cuts, I didn't get home until close to 1:00 in the morning.

I understand that kids get nervous during auditions. It happens, but if you can't tell the difference between a nervous students and one who isn't prepared, you probably shouldn't be a part of the judging process. I am all for time limits on auditions. At the middle school level, no student should take more than 5 minutes to audition. At the high school level, 2 minutes for scales is good. For the etudes, I would suggest calculating the required performance time of the piece at 75% of the slowest tempo suggested in the PAL, giving a little leniency if a student is close to finishing the cut when the time expires.

Summary: I agree with the OP in that region auditions should be treated as auditions. Screen your students before taking them. Listening to unprepared students isn't doing your region neighbor a favor, it's doing their job for them.