It may be against "sportsmanship" to execute that strategy, but it's a legitimate goal someone may decide to go for. The problem isn't what a player chooses (fame or riches), or why. The problem is that, the way the payouts and tiers work right now, players can pursue fame, or players can pursue riches (or both, if they are good enough to make it to the final four in A division), and some of those pursuits can put players in conflict with the rules.
A rule that requires a player to play his/her "best" at all times is silly, IMO. I don't play my best all the time. I'm human, so that's impossible. Moreover, someone who tries to show that I'm not doing my best when I should have is in a losing position from the get go, because it is impossible to prove that I didn't do my best. (My word against yours…)
So, step 1, delete the rule about always playing at one's best. It's meaningless. (The rule about collusion should stay, of course. That's match fixing, and no-one wants that.) A rule that requires an individual player to always exhibit the same behavior (to play at his/her best), regardless of circumstances, is not only silly, it is counter-productive, because it disempowers the player. (As you showed with your family finals example, such a rule would essentially require you to prefer Keith Elwin over your own wife. I'm sure you like Keith, but I'm also sure that you like your own wife just a little bit more than Keith. And guess what? You are actually entitled to like your wife more than Keith…)
Step 2, make a decision once and for all as to what a tournament is about. Is it about fame, or is it about money? If it is about fame, get rid of payouts. If it is about money, face reality and accept that, once money is involved, notions of "sportsmanship", "fairness", "spirit of competition", "doing one's best", and similar go out the window. Also accept that, the more money is involved, the faster those notions will take to the open air. And, please, be real and accept that a pinball tournament with large payouts is mostly about the money.
Step 3: After having decided on the answer to step 2, take the consequences and remove either the incentive for not playing at one's best (that is, remove the tiers), or accept reality and that, if money or fame are involved, players will come up with strategies that some part of the community finds distasteful.
I think that is a meaningless question, in the sense that it is impossible to discern the motivation of players who enter Pinburgh. It is reasonable to enter with that goal to some, and unreasonable to others. Pinburgh cannot look into players' heads (thankfully so).