Thanks to Stephan Kesting for his advice on comp nerves.
I don't do a lot of competition these days, and I do miss it (and the wonderful focus it adds to your training). One thing I DON'T miss, however, is the stomach churning anxiety that accompanied competition. Basically on the day of a competition I became an emotional wreck: moody, grumpy, nervous, and asked myself again and again "why am I doing this". All these emotions dissolved pretty quickly once the matches started and I had to focus on grappling with a real opponent rather than with my fears and worries. After the competition, if I'd performed up to my potential, I was usually deeply satisfied and eager to do it all over again.
Interestingly there was a period of time when I felt considerably less pre-competition anxiety. This was a two year span when I was competing fairly often: I participated in submission grappling and Brazilian jiu-jitsu tournaments, but I was also competing in Firefighter Combat Challenge events (www.firefighter-challenge.com). Although the Combat Challenge was a very different event than a BJJ tournament I definitely felt that there was a carryover effect; there were still crowds, cameras and the potential to screw up royally.
Somehow with competition being a more regular feature of my life, as opposed to something I maybe did once a year, I started feeling less nervous. I can't say I ever felt normal while waiting to compete, but it started to become a bit less stomach-churning, and eventually it started feeling a bit like it was just another day at the office. I attribute my decreased anxiety purely to the desensitization which results from repeated exposure to a stimulus. Get out there and do something often enough and eventually it will start to feel normal.
Interestingly enough this desensitization doesn't last forever (or at least not in my case). When I started competing less regularly the nerves came back just as strong as always
It's not that I think everyone has to force themselves to compete - many grapplers are happy to only 'compete' on the mats of their club via regular regular sparring. Some people just don't like competitions and this is perfectly OK. If you WANT to compete, however, and if you find your performance impaired by nerves and anxiety, you might want to see if you can break through the anxiety barrier by competing more, not less. Additionally, consider competing in any other sport that appeals to you, be that 10 kilometer runs, rugby tournaments or fly fishing contests. Like me, you may just find that there is a carryover anxiety-quelling effect from these other sports to your grappling competitions.