Being primarily a stand up fighter, my view is that BJJ is able to prove it's effectiveness by positional dominance and submission by tapout. Where stand up has a more difficult time showing effective techniques due to people's reluctance to being struck in the face and other vitals.
For
@Tony Dismukes and any other BJJ black belts here, I pose the question as stand up art how can we better judge a person's ability without damaging eachother.
I'd say that with striking arts, contact sparring is the necessary route both for developing and testing ability.
Unfortunately, there is a tradeoff. More contact and fewer restrictions means greater development and more valid testing. It also means a greater likelihood of serious, possibly permanent injury.
The best test would probably be something like the matches at a Dog Brothers gathering*. Full contact, minimal protective gear, weapons allowed, very few restrictions. Most of us, even serious martial artists, aren't up for going that far. The next step down might be Muay Thai or Kyokushin-style sparring or contests. From there you can go step by step down the ladder until you reach light/no contact sparring with severely restricted targets and techniques.
*(Another path is to have a career path or lifestyle which leads to actual real-life physical confrontations on a regular basis. This has advantages and disadvantages of its own.)
I'd posit that the best path for most people is to
a) observe what consistently works for the people who do fight or spar full-contact with few restrictions, and build a technical base around that.
b) spend most of their training working with light-to-moderate contact and relatively few restrictions on technique (according to their physical capacity and level of risk tolerance)
c) at least occasionally, bump things up to hard-contact sparring or even full-contact competition to get a feel for what it's like to really give and/or receive some damage.