Well put, JR...
I think that USTA competition is very much what you make of it. I enjoyed playing with a mixed doubles team for a couple of years because we were competitive and we also got along really well. There are the disappointing stories, too. My biggest beef with the organization has to do with their shift towards a more "hands-off" posture with the NTRP ratings. The sandbagging issue is absolutely toxic and I think that the USTA can only control it by getting more qualified eyes on its members with initial ratings as well as some unannounced spot checks. A computer can only discern a player's ability in general terms and the leagues would be much more attractive with more reliable ratings among the players.
Tony - One thing you can keep an eye out for is a local or regional ladder league that's run entirely online. These are gaining lots of traction because they're so simple - you sign up for a really basic fee and the computer pairs you against someone, you contact each other, and schedule your own matches. Then the computer takes the results and maintains the ladder through the season. It's usually used during the months that you can play outdoors and in just the past year or so, I've talked with a few people who like this stuff a lot more than USTA leagues.
Sometimes it all comes down to winning bragging rights for a year, too. There's a regional summer league where I am that's composed of serious hitters - college players, teaching pros, etc. - and their teams play matches through the summer for a league championship. These guys are among the best players around and their league is a pretty informal thing - no going to nationals or anything like that, they just like the competition and it's a lot of fun to watch!
In terms of having more serious prizes to play for (yes, cash), you'd probably need to look around for those tournaments, but some of them exist. I just haven't had the spine to go after any of them yet. I've definitely felt more of a feeling of accomplishment after playing in a weekend tournament than with the USTA leagues I've dabbled with. I find that the tournament is more of a competitive high point, even if I lose in a hurry, than a league match which is more of a routine thing. I also don't like playing indoors, so that's another mark against playing USTA for me...