This is my opinion on the matter...
Is this common or is it acceptable?
There really isn't anything wrong with this technically, I doubt anyone will think badly of it. I've seen clawbots at competition before. Just be clear, you'll do poorly and you'll have difficulty scoring many points. IMO, there is more to learn from building your own custom robot that's really bad and totally fails than it is to build a clawbot. Then go home and evaluate what happened. Thats what most teams do at their first competition anyway.
Or they should not enter into competition if they don't build some fancy custom robot?
They absolutely should enter the competition, the only way to get better and learn is from competition. The added stress, time pressure, intensity really grows a team. Also, you get to see other designs and what experienced teams do. You can evaluate your robot much better after competing with it and seeing its flaws. Make no mistake: its very very uncommon to do well at a first competition, so don't even worry about that. However, I wouldn't advise entering with the clawbot since you loose a lot of the benefits of competition.
At my first competition we went 1 win 5 losses for the day ranked #27/28. That was three years ago. Yesterday we went 7 wins 1 loss ranked #2/37 and won two awards. That improvement didn't happen by magic, it came from experience and persistence. Going to competition is a must.