No, what I'm saying is that in today's world, traditional martial arts schools and MMA schools seem to attract completely different types of people. People who go to MMA schools are looking for a challenge, and people who go to TMA schools are looking something less so.
I agree with your point but disagree with your conclusion. I don't think people chose between this style, school, etc. etc. because of they are to hard or to soft. It's because of several reasons.
1) Advertizing or what name is on their mind. I call this the power of TV and the UFC, a whole new industry was created (and some might argue a style of martial art) due to the UFC type fights on TV. I don't know how many times I hear from people "Well you know most fights go to the ground" so they immediately want to study BJJ, which they really mean MMA because that is what they have seen on TV.
2) Believe it or not some people hate the idea of wearing karate uniforms, or kung fu uniforms. So if they can wear sweats, a tee shirt, they feel more comfortable; like wise for women if they can wear workout attire that is flattering to their appearance they feel better.
3) They also want to see results, so hitting bags for two minute rounds they see improvement in power, endurance etc. etc. in kata training or stance (basics) training they don't see the same results in the same time.
4) Perhaps the non TMA arts are more practical in the eyes of the public. I have two students who studied Modern Arnis, they took their daughter to a local American Karate school and at that school they taught some stick work, they joined only to be told we can't teach you that till you are of this rank (when they had already been studying that as a primary art for a year or so). Go to a JKD school, possibly a MMA school, or an FMA etc. etc. and you can learn that material from day one. You don't see guys in karate uniforms in the Octogan, and that is what is really being promoted and in the publics eye.
And it isn't always because TMA schools don't provide a physical challenge (although this is the case sometimes), its just perceived that way. If people have gone to a karate or TKD school with 6 year old black belts running around, they assume that this is just the way all karate and TKD schools are, therefore they perceive these styles to be "soft" styles and would not be something they are interested in (even though the karate school in the next town over could be a hardcore school). So instead, they look for MMA/MT/BJJ/boxing gyms because those are "known" to provide more intense training.
Again I agree with you here but disagree with the concluding sentence. Yes, you don't see kids running around in the MMA schools wearing black belts, but I don't think it is because they look at the TMAs being soft, but rather the MMA schools as not being the place for kids. So in a sense the MMA schools are looked at as being more "adult" which is where young adults want to go.
Look at the rise of Krav Maga schools (and their off shoots) they have hard work outs, they teach self defense related material. However they also have more everyday friendly workout attire, have a huge marketing campaign (i.e. branding), they have posters ads showing fit people doing fit things kneeing people, defending against gun or knife assults etc. etc. Adults relate to that and want that vision, which is why their schools are growing.
Karate or the TMA is also viewed as more family friendly; parents take the kids, then siblings, and sometimes parents join as well. The local karate schools marketing campaigns reflect this, the referral programs, etc. etc. all promote a safer, friendlier, place to train. Also taking the martial arts (TMAs as well as Modern Martial Arts), is now seen as a activity not something to do for a life time.
That adults are not looking into the karate schools goes beyond just the more intense training, but I do agree that can be part of it.