A few comments,
You treat this as though it were for a prospect. Now, that may well be all and good and stuff, but posting it here on the forum, and giving it to a prospect are a bit different. For one, the amount of time. A prospect knows that they will have a week to complete the tasks given to them ahead of time, so they can adjust thier schedule to make time to do it, or ask for an extention. Here, no one was given that ahead notice, it was just dropped on people. Probably some people knew how busy thier week was going to be, knew they couldn't get it done, so didn't even bother to start it all. Perhaps if this was run more like how the fan art contests were run, giving the community a month's time, then people could prepare and get something done. Surely, if a person planned to participate they could find the time to work on something in a month's time much easier than a week.
Another point I'd like to make, is that maybe 2d textures isn't what some people are interested in. Maybe they are looking into something say more along the lines of 3d models, so they didn't participate. Just becuase the first attempt was lackluster at best should call for the immeadiate discontinuation of the official contests. That'd be like saying I'm never going to go to or surrport GM events becuase one event didn't go so well do to problems. If the turnout isn't as great as you may have hoped it to be, that's a shame, but it shouldn't mean just giving up completey. Perhaps try something differnt next time. Mix it up a bit, give options, rather than one set subject to do. Those community contests held not too long ago, produced some nice results, I'd hate to see that be all for naught.
Also, not really sure aobut this, but has this been advertised anywhere but here? In IRC, maybe a MOTD on the game, or on the planeshift.it or someplace else, to reach a broader audiance than just the forums themselves.
Okay, I'll be a good menki and be quiet now, let the artists do their artisticy things without all my blabbering.