I cannot find their costume contest rules anywhere, so I can't say for sure, but I HAVE seen a video of an entire masquerade from 2011, and no one I noticed had an original version of any costume. Of course, I can't be certain, but I can see where they might make a rule stating only their (Blizzard's) designs may be used.
Honestly, it's up to the rules of the CON and not the "rules" of the judges. Our costume contest allows original costumes because, while it is mainly an anime con, it has a huge multi-genre component. If a judge decided not to award a costume because it wasn't an exact media re-creation, and we found out, we would not have that judge back. As it was, an original costume which was inspired by Harry Potter and incredibly creative (she even had a "pet dragon" which breathed smoke!) won Best in Show this year. But I can totally see big cons excluding these costumes on the basis that their cosplay contest is already way too big, though I'd still just limit the NUMBER of entries so as not to exclude something which could be really awesome arbitrarily.
Cons 2013/2014 - Ecto Con | Chicago TARDIS | Ahn!Con | Kawa Kon | Wizard World St. Louis | Costume-Con | Marcon | Cosplacon | Dragon*Con | Archon
In Progress- Cecil from Welcome to Night Vale
| Jonathan Strange from Jonathan Strange & Mr Norrell
| Madeline Westen from Burn Notice
Misha's Costumes in Progress- Mr Norrell from Jonathan Strange & Mr Norrell
Ecto Con: St. Louis's Ghostbusters Convention!
Kawa Kon: Into Darkness in 2014!