I didn't participate for a few reasons (traveling Friday, sick with horrific coughing fits anyway, skepticism, need for sleep) but from the outside I'm not sure this is a successful model. If you look at the projects developed this weekend, they seem to share several features common to the Minneapolis startup (or at least Minnebar) "scene". They're mostly social or mobile plays--- not enterprise products or SaaS. They're quick-turnaround, low-investment sorts of projects. They sound good and can be quickly prototyped, but few seem like big-growth ideas. More than a few duplicate existing tools or markets, and others do not seem to have any significant revenue stream that could be identified.
Would you, as a potential angel with $50K to invest, put it in *any* of these ideas? Would you, as a VC looking to make a $1-5m investment, consider the upside on any of these projects worth the risk? That is not to say that these cannot be worthwhile, or even successful, projects and businesses. But they're unlikely to attract the sort of early-stage funding which Minnesotans complain we lack.
Now, it may be fair to say that this is a "learning by doing" teaching and networking environment, rather than an incubator for quality ideas. But building a startup is hard work, and far too many of the ideas I see here (and from Minnespark) are more about "what can we put together quickly" rather than "what will scale to a successful business."