OK, I've got some thoughts on how people in Traditional Chinese arts ought to train.
First, basics are important. Stance work, foot work, how to punch, kick, and do other strikes properly, blocking, evading, etc. This is the stuff that everything else is built upon. This is the foundation. If this stuff is weak, all the rest will be weak. Don't build a house on a foundation made of sand.
Second, forms are important. Forms teach how to link basics into useful combinations on a theoretical level. This is where the bulk of the material is taught, that makes up the system. This is where the nuances and flavor of the system is most apparent. This is where Mantis looks like Mantis, Monkey looks like Monkey, Tiger looks like Tiger, Crane looks like Crane, etc.
Third, power and conditioning should be developed thru striking. This can include arm-against-arm, heavy bags, makiwara, sand bags, wooden dummy, etc. These exercises harden and condition the striking and blocking surfaces of the body, and develop the ability to strike with decisive power. Tools like the Wood Dummy also develop movement, positioning, angles, and to some degree, useage of techniques.
Fourth, useage of the material needs to be developed. This can be done in many ways. People need to have training partners to work with, where they take the material from the basics and forms, and apply it against realistic attacks. Partnering should run the full range of cooperative (when first learning how to use the technique) to completely uncooperative (to develope the ability to use the technique realistically, in an unpredictable situation). There are many ways to develope this kind of training drill, limited only by the imagination. Most systems also have traditional drills that are designed to develop this skill, such as Chi Sau in Wing Chun.
Some type of free sparring should also be used to remove any cooperation, and develop skills that can be used creatively, and in an uncooperative situation. The problem is that people can get too used to sparring and training with people from their own school, and within their own style. It is good to get experience training with, and sparring against those from other styles. I don't think this needs to be in the form of a tournment. What would be best, in my opinion, is to develop friendships with other schools, or individual who train different arts, and spend time working techniques, and sparring, with these people. It shouldn't be competitive, but rather in the spirit of everyone learning and growing.
I believe that the problem most people encounter is with focusing too heavily or exclusively on one or two aspects of training, and not enough on the others. To be a well trained CMA person, one needs to train all aspects, so they understand their art on a technical and theoretical level, and can also realistically utilize the material that their art holds.
Any thoughts are welcome.