I don't know of any test track skater who competes, but I would think that the biggest concern would be that they wouldn't be in eligible competitions. They would have to 'give up" their dream of the Olympics or being a national skater. That is a big let down for kids.
Test track doesn't make you ineligible though, you could go back to eligible skating anytime you want. Test track exists so kids can test up, and still compete. It used to be that kids who weren't going to be "stars" either had to stay in low levels and not test, or test up and get creamed in competition. Now kids can work through the tests, and still be able to compete at a level they are capable of.
Most of the kids who skate test track around here don't have any sort of Olympic dream (at least not any real one- they skate for fun).
JJane- As for the tests being "wrong". I disagree. Getting a senior test is a realistic goal for many high school aged skaters. Getting to senior nationals is a far away, very difficult to reach goal. Making the tests so far out of reach would be incredibly discouraging, and many skaters wouldn't stay in the system. USFS needs the money from the lower level skaters to support the elite levels.
The tests are a minimum standard to enter the level. And when you enter the level, you aren't going to be competitive if you just have the minimum standard.
MITF tests have no basis on level. You can't call yourself a novice skater if you've passed only MITF. If you passed, singles, dance, or pairs you can (though most dance/pairs qualify it with "novice dance/pairs"; singles don't feel the need to qualify because they are the default).