Guy:
Short-short stories are also not in my skill set. I have never entered the SSC because there is no way I could ever write a meaningful story that short. If you simply average the number of words for the stories submitted to the Summer Vacation contest, I think you will find that our writers have told us what word count they prefer (not that the readers don't deserve a say too) .
To the Contest Management: Given the amazing number of stories, and the goal of giving encouragement to the largest number of writers, I suggest you retain your "3 winner" plan, but also consider giving "honorable mention" for the next few highest scoring stories without divulging their actual scores.
Since they're not giving out cash prizes for this contest, in fact they're not even giving out blue, red and yellow ribbons AFAIK, it wouldn't hurt to name a few "honorable mentions" as well and that might encourage participation in the future. The real fun is just in writing and reading the stories, the challenge of putting together the concepts of summer vacation and spanking in some sort of plot line and seeing how others approached that same circumstance.
I'm figuring that if the upper limit of the stories had been around 3,000 words, many of the entries would've gone with about that many--like gas expanding to fill a particular volume. As I stated earlier, to me around 1,500 would be a decent compromise length in making it easier for people to read more stories for voting purposes but still allowing a decent degree of characterization and plot development.
Writing to a 500-word limit (the SSS newsgroup's Short Story Contest) can be somewhat frustrating, I give it a try every summer but it does tend to require limitations RE story aspects and usually requires more effort and imagination by the readers... --C.K.