A competitive division would see more great fights, and could produce a great champion as the best usually rise to the top. The problem with a great champion in a less than competitive division is sometimes people don't appreciate the quality of the champion. See Wladimir Klitschko as an example, he often doesn't get the credit he deserves for being so dominant because it isn't a particularly deep division, and no-one is especially competitive with him when they step into the ring.

The light-welter division is a good example of what could be a competitive division producing a great champion. Its a tight run thing between the guys at the top of that division, but with them starting to fight each other soon the best will rise and begin to establish themselves as a great champion. That's assuming the Khan-Maidana and Bradley-Alexander winners fight each other.