I totally agree that short demos don't do these hackers justice and that being selective on admission also not an attractive option either. In fact, I'm not sure if there actually is a best answer for how to handle the situation. On some level, you always end up having to pick the lesser of three evils and somebody always ends up getting left out because of it.
If I do come up with a good system, I assure you, you'll be the first to know!
If I do come up with a good system, I assure you, you'll be the first to know!