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
Those "dad coaches" can be quite toxic as well. Once in a 5th grade baseball league, my coach said he was gonna sic his dog on me if i didnt start trying. In hindsight it wasnt a super serious threat but it spooked me at the time because the dog was there and off leash, and i had a mild dog phobia back then.
A lot of toxic ideas about competition probably stem from parents whos who desperately want to feel like theyre winning but can only do so by pressuring their children into being perfect and living vicariously through them.