The whole point is to set up Gaara as the final boss of the arc.
- He killed those goobers he ran into.
- He cleared the test in record time.
- His brother and sister are handlers for his madness
- Lee destroyed the Sauce
- Gaara destroys Lee who pulls out tricks that would have obliterated everyone else in the contest.
Plus it sets up Lee's redemption angle and another reason to track down Tsunade.
Yeah it totally makes sense, but damn do I love to root for the underdog. Honestly sometimes I felt I'll rather have Rock Lee as the protagonist instead of Naruto, but it made for a great story at the time.