I'm sorry, all of this brouhaha is just blatant PR mongering.
I'm an American who has danced tango here in BsAs since 1997. I also was a Finalist in the 2006 Metropolitano championships, coming in #15 out of more than 500 couples competing. I did not feel discriminated against at all for being foreign.
I moved to BsAs in 2003 and so was a legal resident of the city. Why can't there be a competition of people who live in BsAs?
ALL other dancers from around the world can compete in the larger competition in August--El Mundial. And in fact, sometimes foreign dancers even win!
There is more to this story than meets the eye, which probably has much to do with sour grapes and attention clamoring rather than tango ability.