Yes, it is an industry award.
It was set up in the absense of The Webcartoonists' Choice Awards, which has generally been much stricter in terms of nominations. We've gone with something that's a bit more open, allowing print creators, staff at comic hosting sites, reviewers, bloggers, convention organisers and so on to nominate as well.
The problem with allowing readers to nominate as well (other than it being completely against the spirit of the thing we decided to fill in for) is that there is no way to counter fraudulant nominations. Anyone can set up thirty yahoo accounts, twenty google accounts and twenty-odd hotmail or whatever it's currently called accounts, but in limiting nominations to people that have an involvement in comics in some way reduces the risk massively.
Also, I'd be quite surprised if there were many, if any, webcomics out there that have high enough readership that should the awards be open to everyone they'd get enough nominations to be noticed, but didn't have any other comic creators as readers. Webcomics by their nature are very open for new creators and as a result seems to have an unusually high amount of the audience who are creators as well.
As for the reasoning against self-nominations, we want people to nominate the comics that they think deserve to win in each category. It's as simple as that. Last year we had some nomination forms through from people (who will remain unnamed) who didn't read the rules before filling in the form and nominated only themselves for certain categories. That's really not what the idea of these awards is and if we allowed self-nomination then you can garauntee we'd get more forms like that as well and a lot more comics with only one nomination in a category.
We're perfectly happy for people to ask for nominations. It's good publicity to have creators mentioning the awards, but it has to be other people that nominate their comics.