Daisy, as a former daylily garden judge (for a few years), I can confirm that "distinction" is one of the things that you are looking for in new seedlings.
"Distinction" covers a lot of ground, though. It includes notably better (as in exceptional) branching, budcount, period of bloom, time of bloom (as in season extenders), form (or a new variation in form), color or color pattern, and so on. Some things are easier to tell when you are standing in a garden looking at the plant in bloom, other things you have to ask around (from folks who locally grow it, as to what exceptional thing have they noticed over the season, like perhaps reliable early morning or cold morning opening or multiple rebloom cycles or exceptional heat tolerance in the bloom substance).
But here's the thing... Just because a plant has some novel distinction (new flower form, color, whatever), you aren't supposed to overlook other basic factors (health of the plant, bloom size in proportion to the scape/stalk height, bloom properly above the foliage (not down in it), decent enough budcount, good branching, and on and on). You just aren't.
But (speaking again of daylilies... I'm an eternal beginner when it comes to irises) that simply doesn't seem to be the case. Otherwise (imho) daylilies that are rust buckets wouldn't be getting awards. Or at least, they shouldn't be. And any that slip through with an H.M., definitely shouldn't go any farther.
So... something similar may be going on in the iris world.
Judges susceptible to a gee-wow factor. (Yeah, judges are human too.)