Earlier quoted context omitted.
Be somewhat competitive to what such developers could get on the black market. Discounting the ethics. Surely a bug on Chrome is worth more than a bug on Firefox.
Should I be competitive with meth manufacturers when I buy prescription cold medicine from a pharmacist?
But more to your point: the bounty is more similar to an auction. Once you sell the bug to the software producer the black market has no more use of it, assuming it gets fixed.
Supply is constrained, so competition is on the demand side.
On the drug example demand is constrained, if you're the only buyer. So competition happens on the supply side.