Nobody needed to carry 50 gb. In fact, nobody needed the wheel. They are things we wanted because they improve the quality of life. QoL improvements are not necessities - they're luxuries.
It's a figure of speech. Yes, everything's a luxury. But the point was that even in a world without competition, things would get developed as people want them, and as they would benefit themselves and others. A lot like the opensource idea, but more widespread.
Universities don't simply compete with one another for money. Money is a means to an end.
Do you think that, by having everything be average, that it inhibits the people who could do better from doing so? Probably not; those people go to American universities.... 
Seriously though, without things like competition across universities and jobs, I don't believe that the exceptional people could have the opportunity to truly live up to their potential. And, if they don't, does it really benefit society? Would it benefit society to not have people as exceptionally bright as Albert Einstein or Stephen Hawking?
There are certainly cases where competition is bad. There was a great example in House - during a story arc, the hospital was taken over by a wealthy businessman who owned a pharmaceutical company. It would have been bad business for the hospital to be in bed with the pharmaceutical company, specificall doing clinical trials - it might be worthwhile, or it might not, to try a new drug. But, the patient would not have been receiving the right standard of care.
Have you ever read Harrison Bergeron? It's a short story by Kurt Vonnegut - you can find it here. About 5 or 6 printed pages total. I highly recommend it.
The only way we can truly equalize everyone is to bring everyone down to the level of the least common denominator. Is that really what would benefit society?
I don't see how encouraging people to work together instead of fighting, and having accomplishment be its own reward would suddenly force everybody to be equal. I don't think that a lack of competition means that everybody's equal; to me, it means that people don't spend extra effort trying to do better than what others are doing, that creates feelings of hatred, resentment, depression, and so on. In any case, I most definitely do not believe in equality. I strongly believe that everybody is different and everybody has strengths and weaknesses. I don't subscribe at all to the Sesame Street belief that you can do anything if you try. Unfortunately, some people may have great skills in some field that they can't get paid well for, so the world is deprived of that skill. For example, my cousin is an amazing painter, absolutely incredible, but she isn't going to pursue it because she can't make a living off of it.
Other examples are theoretical physics and philosophy. They are both great fields to pursue, but can anybody (outside) the field name more than a couple people currently working in each of those fields? In this world, it takes somebody who doesn't care about making a mediocre salary their entire lives to work in those fields. So how many people with great potential there are we losing? I would guess a lot.
An ideal world (that I don't think is realistic right now, but I think it's a goal to work toward) is that everybody can pursue what they enjoy and what they're good at without having to worry about whether or not they'll get paid a lot to do it. A great artist should be able to do their art, and a philosopher should be able to do their philosophy. I was fortunate that my particular interest is something that pays decently.
Your life is a great example. The next time you apply for a job, will you list that you worked for Symantec? Honestly, the primary motivation for me to work for a company like Microsoft or Symantec for a couple of years is that, once I've done so, I can pretty much write my own ticket. I'll never be at a loss for a job unless I suddenly really start to suck at what I do. The fact that you worked at Symantec differentiates you from a crowd, and makes you a more valuable commodity than the guy who just graduated from the university, even if his emphasis in school was security analysis. Competition is an intrinsic part of who we are, because there's always something that somebody wants, and always somebody who wants to provide it.
Yes, I'll list that I worked for Symantec. However, I didn't work there so I could do it. I worked there so I could learn new skills, gain experience, improve my self confidence (which is something I always lack), meet new people, and enjoy myself.
Competition is definitely an intrinsic part of our current society, but I think it's a bad part. I really don't think that competition is a good thing, I can't think of any benefits of it. When people or companies are competing, they are more likely to cheat, they are more likely to make poor or hasty decisions, and they're more likely to ruin the life of somebody who doesn't deserve it. When you remove competition, they're more likely to work together. For example, Linux, Microsoft, and Apple all have OSes with both advantages and drawbacks. If they could work together to build an OS with all the benefits, life would be better for everybody.
Another example is that there are many brilliant scientists in the world who are competing for things like prizes, rewards, money, etc., so it's in their best interest to share their findings with each other. This leads to different people doing the same research and learning the same things, which is a waste of resources. If they could work together, they could gain new insights into what they're doing and likely benefit everybody.
In school, tests and scholarships are a form of competition. So some of the students do well and are rewarded, whereas most do poorly and are told that, because they don't do as well in the same subjects as others, they aren't as good, they won't amount to anything, and so on. That's a huge hit to people's self esteem. Just because they may not be as strong at the same subjects as classmates, should they be treated poorly? I don't think so.
I realize I'm going on, but this competition thing is something I've been putting a lot of thought into lately. No, I don't know how to get rid of it, and I don't think the world would work in the way I suggest if it were suddenly removed. I think it requires the growth and maturity of people before it could work. I do, however, think it's something valuable to think about. We are totally socialized/brainwashed to believe that competition is normal and healthy, but I don't think it is.
