You can be taken advantage of simply by participating. Hackathons that are tacked on to events are a great example: they're simply a way to sell more tickets. I've been guilty of this in the past on shows we've done (Twitter's Chirp conf, etc).
Can good things happen at these hackathons? You bet. That doesn't mean Developers shouldn't be careful though.
As for "20-hour days", that's just a number you've thrown out. Who's to say you couldn't have a great work/life balance at a hacker mansion?
The whole point of a "hacker mansion" is to work 7 days a week for three months straight.
Living in a hacker mansion right now, I can guarantee you that isn't the case.
Our hacker mansion is filled with people working on different companies, at different stages (some funded, some not, some with customers, some without, etc.), and all of whom add something interesting and different to the diversity of the house. I take _at least_ 1 day a week off, often two. But frankly, sometimes others have to tell me to, since I love what I'm doing.
In short, hacker mansions can work out great if the people there are vetted, smart, passionate, and okay with having social lives. If you get together a group of people who are only going to work 24/7, guess what, they'll work together and burn out together. That's not the house we built.
Furthermore, I get to hang out with deer and wild turkeys while I relax in an enormous house with killer amenities; I wouldn't have the money to pay for that myself. I code and run my business mostly from our shared office space in Palo Alto.
(Full disclosure: this is a separate and entirely different hacker house from the one ryancarson is talking about, but a hacker house nonetheless.)
Have you ever lived in a hacker house? I haven't, and if you haven't, then I don't think either of us are in the position to say the whole point of living in a hacker house is to work non-stop. You simply don't know that.
Of course lots of work is going to get done at such a place, but who said that the experience and fun wouldn't also be incredibly beneficial to a young developer?
I lived in the Palo Alto hacker house for a time. It wasn't "rah-rah entrepeneurs!!!" - though it had some - it was just a comfortable place to talk with people on similar wavelengths.
I've lived in 3 hacker houses (still living in one now), and it's been a nice place to live with like-minded individuals. It's equal parts fun and hard work.
Can good things happen at these hackathons? You bet. That doesn't mean Developers shouldn't be careful though.
As for "20-hour days", that's just a number you've thrown out. Who's to say you couldn't have a great work/life balance at a hacker mansion?
The whole point of a "hacker mansion" is to work 7 days a week for three months straight.