I listened to a BBC radio thingy recently about opening lines to novels, and they talked for a few minutes about Bulwer-Lytton and the contest. They talked to, I think, a grandson of his, and he’s a little irritated about the whole thing. According to him, that horrible opening line was in essence a joke. The narrator of that book was intentionally kind of a pompous windbag, so Bulwer-Lytton himself was intentionally writing a bad opening line, because that’s how his character would talk. Kind of ironic, really.
Also, he was incredibly popular in his time, and quite well respected by the literary types of the era.