That is pretty disappointing to hear - Intel's execution and involvement with the fair has been a great model for all STEM competition. The other major high school research event, the Siemens Competition, seems much less rigorously conducted (they're dropping the finalist talks for teleconference presentations this year) and doesn't capture the same brand recognition that STS does.
Still, since so few students interact with STS compared to, say, ISEF, it may be that Intel is trying to expand its reach by de-emphasizing the elite and looking to support the broadband "maker movement." It is also unlikely that Google, which the article mentions, will pick up the banner - they run their own Google Science Fair (which hasn't yet captured the prestige of STS). We'll see how it goes, but I and many others will miss Intel's STS, the crown jewel of high school competition.
Not really, it suffers from the same issues that most STEM competitions do. The rewards go to the children of successful parents who gave their children important aspects of their own research or self-funded them to develop an existing idea.
The competition still has prestige, but most of the awardees didn't get where they are on their own abilities and interests.
While I agree that perhaps we could use some more diversity in science research competition, I think you underestimate the scale of work and dedication required - look at Sara Volz, the 2013 winner, who notably did much of her work in an improvised lab environment [1].
If you're interested, do take a look at the 2015 projects - Intel STS winners are by no means coddled or fed on "fake" science. Perhaps there is an undesirable concentration of talent in certain schools or regions, leading some to question the privilege enjoyed by the winners, but there is no doubt in my mind that the awardees have performed immensely well to deserve their honors. By the way, some of the best labs/resources are also offered through meritocratic selection - Harvard/MIT's RSI and Stanford's SIMR programs both offer excellent mentorship and cutting-edge resources to summer students through an application process. These students often end up winning these competitions too, with no parent involvement.
Still, since so few students interact with STS compared to, say, ISEF, it may be that Intel is trying to expand its reach by de-emphasizing the elite and looking to support the broadband "maker movement." It is also unlikely that Google, which the article mentions, will pick up the banner - they run their own Google Science Fair (which hasn't yet captured the prestige of STS). We'll see how it goes, but I and many others will miss Intel's STS, the crown jewel of high school competition.