Animated wallpapers work fine on Plasma natively. But, no: the contest is only for static images, as animated backgrounds tend to be quite resource hungry and we need Plasma to work smoothly on all kinds of hardware, including low-powered and older machines.
@Bro666 what if its a very small animation (eg. 2, 3 or 4 frames not changing much) and its tested to NOT be resource hungry?
like for example animated space with stars or a little waving water?