Pretty much everything in life "reward[s] people for making accurate predictions". That's not the issue.

The problem is that to "supply accurate information" you need to know what is "accurate" ex ante and you don't. At the time you submit your bet to a prediction market you're operating on the basis of expectations -- you have no access to the Truth about the outcome, you only have access to your own beliefs. Accordingly, you don't tell the prediction market what is the correct choice, you tell it what you believe is the correct choice. Prediction markets aggregate beliefs, not truth values.