I have seen many parents of very young kids (age 6-7 and below), hand over their mobiles and laptops to their kids in order to keep them engaged or to distract them when the kid is crying or creating trouble. For kids even a smart phone is just like a toy. Many a times they will end up breaking the phone/gadget and then we hear the parents complain. I think here the onus lies on the parents to abstain from resorting to handing over gadgets to kids just to get some relief from their tantrums.
A childs' learning capacity is very high during the formative years, so yes they will definitely very easily pick up how to use gadgets perfectly. However, that is not the kind of knowledge that is essential to be learnt at that age. It is more important to develop motor skills, social skills etc. at this age. While mobile and computer games are good for hand eye coordination, however extended continuous use of either can cause pain in the hands and stress on the eyes.
Coming to use of internet for gaining knowledge, well this comes up at a comparatively later age (8+ usually). It is not only happening due to the excessive competition, for competition has existed even before the use of internet became rampant. Its just that a new avenue of knowledge seeking has opened up and kids are making use of it. In general when it comes to the competitiveness, our younger generation is suffering a lot. There is too much taxation when it comes to education, be it homework or tests or assignments. Too much burden is being put on their shoulders by the education system as well as overzealous parents. Luckily many in the education field are starting to realize this and are taking necessary action, but there is still a long way to go before childhood can be reclaimed for children.