"…scanlines were used to blend “pixels” together, plus “pixels” on a CRT tend to bleed color slightly and artists would also use that to their advantage."
For competitions, the performance benefit is zero time lag between controller inputs and the screen output.
Also, it's very very difficult to get the "look" right on an hdtv. The original graphics were intended to be displayed on a slightly "fuzzy" CRT, and if you care about the aesthetic, just transferring those same graphics to an hd-tv display often doesn't look right in a bunch of different ways. (Pixel aspect ratio, aliasing, frame blending effects, color bloom effects, interlacing artifacts, etc.) It's a very deep rabbit hole you can go down.
Aside from the visuals (4:3 to 16:9, etc), converting the analog console signals into digital formats for your flatscreen creates lag, enough to often ruin the gameplay.
Even though I have a CRT and NES, I bought one of the NES minis when they released.
I played some Mario Bros 3 and... I kept dying. Jumping too late led to running into holes and enemies. It was so bizarre, I couldn't believe how bad I'd gotten. Tried the next day, same deal.
Then I had a thought re delays. Pulled out my NES and hooked it up to the CRT and all that stopped
There was sufficient delay in the NES mini and modern TV it made a huge difference.
I'm sure I could retrain myself, but it was honestly stunned at how much of a difference it made
It’s difficult to overstate just how little lag there is in such setups. These systems had no frame buffer whatsoever - everything rendered on the fly. You could potentially affect a frame after it already started.
That said, if you ever get an urge to play Mario on modern hardware, try run ahead emulation. It’s quite magical.
I've always found the litmus test of choice for measuring lag is NES Punch-out - your performance in that game is heavily dependent on lightning fast reaction time and any additional latency towards the later stages will 100% get you KO'd.
People that play competitive Smash Bros Melee will only play on CRTs.