People have had some fun with the SC online tournies run here. Sure some people take it seriously like it's an actual tournament, but there are plenty of people in the world with worse misconceptions and false beliefs to be sure. Personally I'd never enter one unless there was a huge prize on the line (tried to luck my way through the GGL tourney, for example) but for people that are willing to play this online, sure why not?
Just because it's not a real tournament (it's really, really not) doesn't mean people shouldn't play and have fun. Just understand that it's not a real tournament, is all.
EDIT: rereading the rules, why 99 seconds? That's typically the 2d fighter default, 3d fighters use 60 or below depending on the game's default. Pretty sure default for Tekken/SC is 60 seconds, which is also the tournament time setting. Also, you didn't mention single or double elim, I'm assuming single since double is a nightmare to run online. Some things to consider, good luck moving forward with this, hope everyone has fun.