Algorithms are very useful to know, both for interviews and for real life coding, but a lot of the projects that you'd pursue for fun wouldn't have a lot of algorithmic content. Problems from this sort of contests force you to focus on tasks which make you learn about algorithmics instead of spending your time on ancillary issues.
Being high-rated in these competitions requires quite a high amount of practice and participation, so in that time, you could've been learning a lot of new skills and building things.
However, knowing a lot about algorithms can be very useful in many situations as well.
And for instance, Google has those (in)famous algorithms questions in their interviews, so I guess you'd be more confortable in them.