Apparently, we as the martial arts community haven't learned anything from watching the bastardization of Taekwondo and Judo. What were once effective martial arts systems have been relegated to the same status of synchronized swimming and gymnastics, and now the same fate has been set in stone for traditional karate as if the divide between classical training and competition wasn't large enough.
The problem is when instructors decide to only focus on the competitive aspect of martial arts and completely disregard the essence of the art itself. They become coaches rather than instructors, begin referring to their schools as "gyms" or "clubs" and their students as "players." The aspiration of becoming a champion and winning a piece of plastic takes over, and rather than teaching their martial art as a complete system, focus only on the techniques and strategies effective for winning an award. Throughout history, people have always admired athletes and rightly so. They represent the physical "perfection" that we all strive for. When playing their respective sport, they move with such grace and elegance, such class that it is nearly divine. And there's nothing wrong with that. However, martial arts are not sports.
The lessons taught through the study of Budo transcend our meager understanding, and they become a way of life. The way you walk, talk and breathe bear the essence of Budo. We train to protect ourselves, our families and our homes. We train to better ourselves. All martial arts have their foundation in combat and self defense, therefore every art has the potential to be effective in the real world. Effectiveness lies not in the art itself, but the training methods of the individual school and instructor. There are only so many ways the human body can move, so to say which art is more effective than another is ignorant. As a martial artist, like anything else, you are the product of your training.
There are plenty of Taekwondo and Judo schools that hold true to their roots and teach effective martial arts in addition to competitive techniques. Unfortunately, they are still in the minority and continue to shrink in numbers on a regular basis. I fear the same for traditional karate. I fear that the allure of Olympic status will draw people away from their classical training in waves so that they can focus solely on competing. They'll gradually practice kata and bunkai less, and skip their hojo undo in favor of running to build up stamina and getting a few more rounds in. Even those who compete on the open circuits will transition to WKF-style fighting so they can have a chance at Olympic gold. The quality level of competitive fighting will reach new heights, and we'll see some of the most athletic, elite tournament fighters ever produced.