There are a few significant problems with NaNoWriMo. First, while a challenge must be challenging, it should also be realistic. For many writers, 1666 words a day, every day, is a bit too much to expect. Second, the requirement that the project start from zero is also a deterrent—it encourages a “starter” attitude when what’s needed is a “finisher”. Finally, the unrealistic deadline in combination with the start-from-nothing requirement makes people throw away their perfectly good work from last year. You wrote 80 pages? Toss it!
Sure, writers need practice, but such extreme conditions are not conducive to practice at all.
> For many writers, 1666 words a day, every day, is a bit too much to expect.
Well, with NaNoWriMo you have a whole month. So some days you may in fact have 0 words, and other days you'll have 4000. But in general, the more you do this, the easier it is. Are weekly 2000 word essays from college students who don't really care about English or Sociology or whatever class the essays are for too much to expect? Maybe. I know that after a few months of blogging 1000+ word blogs on a relatively frequent basis, those school essays are trivial.
> Second, the requirement that the project start from zero is also a deterrent—it encourages a “starter” attitude when what’s needed is a “finisher”.
The idea is that at the end of the month you evaluate what you have and decide if it's worth finishing and revising. Your work is not supposed to be "perfectly good". This is the same philosophy over at the Ludum Dare 48 hour game programming competition ( http://ludumdare.com/compo/about-ludum-dare/ ) where you start from scratch and see what you can do. Many people have taken their finished entries and continued to work on them, eventually selling them for real money. Most people don't, they abandon the project, and that's fine. They learned something along the way that will help them be a better game developer the next time around or in a context where they have more time.
NaNoWriMo isn't a reasonable goal for everyone (and not for me either), but it's a meaningful badge of honour. I think there are other events with a similar recipe but an investment that would suit you better (some LJ communities, blog festivals, etc).
Tossing out work would be counter-productive, but I think rewriting your material from an outline would be within the letter and spirit of the rules. Boxing the project into a fixed time period (aside from any preparatory work) is good for motivation: you won't throw good time after bad in a project that is getting stale (when working knowledge and motivation have dwindled), you'll just reuse the same abilities you were cultivating the first time but with a bit more ease; you'll be communing with a large group of people sharing your joys and trials and egging you on.
Sure, writers need practice, but such extreme conditions are not conducive to practice at all.