I think it depends on what attracts people the most to the site. In some cases it's necessary, because the truth is that it's WAY easier to get your average Joe into a video game parody (for example) than an original work. It's how people are attracted to the site... Hell, it's probably what has made Newgrounds what it is today!
So in my opinion, it isn't necessarily always the best work on the front page. It's just what would be most attractive to a wider audience...
On the other hand, they wouldn't put just another crappy mario sprite movie, over a brilliantly animated original feature...