There's no cons to this so long as the campaign converts, and it's something that's very common for PPC so no reason to feel bad about it.

The one thing Google doesn't allow is using a trademarked brand name in your copy, but you weren't planning on doing that anyway.

I'd set up a campaign in AdWords and name it Competitors so you can track it better and so you can decide how much money you want to dedicate to this campaign.

Something else to keep in mind is that this is the reason you should also bid on your own brand name. Why? So a competitor doesn't do it and then rank higher than your organic result with their ad (something I've written about here: http://blog.ispionage.com/bid-on-my-own-brand-terms-adwords.html).

Something else you can do is use a tool like iSpionage to swipe your competitors entire keyword list (disclosure: I work for iSpionage). These types of competitive intelligence tools give you access to the PPC terms your competitors are bidding on, the SEO terms they're ranking for, ad copy they're using, and landing page URLs to provide you with new, profitable keyword opportunities while also providing insights into the entire PPC strategy of your top competitors. You'll learn a lot, and it's a lot easier than starting every new campaign from scratch since you can start with keyword lists that are already working for competitors.

Feel free to message me if you have any questions about competitive intelligence strategies for PPC.