It really does depend on the convention, because quite frankly, I'm tired of having my hours of intricate sewing techniques and ombre dyeing passed over for "ooh look it lights up!"
Lights are a double-edged sword. On the one hand, as a judge, I know what actually goes into making something light up. So if it's done WELL, and done like Dart said as part of a complete package, maybe with a few extra things that might have been difficult - or, if you were a novice and nailed it, difficult but successful - that's one thing. But simply lighting up can't and shouldn't make up for the rest of the costume being terrible. I'm not saying yours is/was, it's a bit of generic hyperbole. There's a difference between adding a little needed spice to a costume and trying to use some lights or mechanical moving parts to distract the judges from seeing the rest of the costume.
And then there's the fact that you might have just been in a crowded field with a lot of people who brought their A game! As a judge, I always have the hardest times when I have a large group of entrants who all did one thing on their costumes well - really well, amazingly - but just one thing isn't enough to elevate them above the others in their class. When you're faced with someone who did a great job on lights, someone with a glorious wig, someone with a unique and successful new wing technique, and someone with lots of great embroidery, but you only have one more judge's merit award to give out, how do you choose? It might not have been you alone, it might have been everyone else in the same skill class with you.
Definitely keep at it, and if you ever feel like the judges at a convention just didn't give you an unbiased shake in ANY regard - even if you came in next year with a beautifully sewn costume and felt shafted just because some guy had a quad suit - then have a chat with the director about your concerns or don't patronize that competition any longer. I have felt unfairly judged at competitions where I came out with awards - winning something isn't always a mark of excellence, when you feel like the judges weren't listening to you.
Founder and President, Madison Area Costuming Society, a chapter of the International Costumer's Guild
Strange Land Costuming - www.strangelandcostumes.com