Why are the communities of competitive games so notoriously toxic? Culture. I think books could be written about the 'cultures' of certain games, but basically, the culture of competitive games places too much value on rank and prowess. And this has a few consequences.
People react to this cultural pressure in different ways. The way we see this most often is people throwing temper tantrums at teammates for poor performances - the logical end-result if someone's worth is largely based off of how well they play. Or maybe they feel cheated of a rank, or number, because the matchmaker put them with someone who they consider lesser. This is a direct insult to them - seeing the game subtract from what literally defines their worth because of someone else feels awful.
This is where what I call de-'sweating' comes in. It doesn't seem to me that there is competition for the thrill of it anymore, but merely to dunk on the other dude across the screen. I don't know realistically how this happens, but the emphasis needs to move, or we get situations where kids sling racial slurs at each other because they couldn't win, and taking that therefore as an insult to their self-worth. Or burning themselves out at age 19 playing 9 hours a day trying to improve to a certain level, so they feel better about themselves.
Ladder anxiety is another common manifestation of this. But that's not the main concern, which is that the laser focus within these communities on your ability to play the game well, and not on competition itself or sportsmanship, fosters the awful environment within these games. De-'sweating' just means rank doesn't matter. It should be a tool for fostering fair competition and even play.
lunchtime text dump over
Games like Blade Symphony, Jedi Knight Academy, and Absolver come to mind as the odd exceptions. There's ranked modes in those as well and people can and will be dicks, but there's also a communal aspect where people can just... sit there and watch other people fight. In fact, Blade Symphony's most popular mode for much of its active life was everyone just sitting in a "free for all server" and utterly ignoring the free-for-all aspect, instead just running up to random people and requesting duels. There's nothing really gained or lost, you get some currency either way for a decent fight I think, but the main goal is for everyone there to improve.
And so what happened was really fun - people started training each other. Freely sharing information, testing things out, constructive criticism, even organized attempts to bootcamp new players joining in so that they can fight the vets better.
There's still that hierarchical mindset that absolutely ends up being the source of much drama, someone on the server is The Best and someone is going to feel a need to argue that it's them and not the people they don't like, but that cooperative aspect of treating an FFA gamemode as a makeshift dojo was really fucking special. I wish more competitive games would have those setups, where you're all trying to improve together and teaching someone else to beat you is as satisfying as winning yourself.
I spent a lot of hours hanging out on the landing platform of the Bespin map watching duels or fighting them. I don't even think I ever got even a little bit good at that game, but the server/community I was with was my formative internet experience. I fukken knew everybody on that server (and on our BBCode forum), compared to today where in every game I play the avatars come and go and I can barely tell one apart from the other. It's like when you read people predicting what the internet will be in the nineties and compare it to how it actually turned out - communities separated only by communication at the speed of light, or individuals separated from each other by an algorithm-based barrier.