Captain Judo has said that in the past there used to be a requirement to compete in order to advance in Judo. That actually makes sense to me, because there is a big difference between doing randori in class and testing your skills in competition. He also said that to make it to black belt, you had to win your matches. Now they have something called “service to Judo” in which a student who is unable to compete (or win) can still advance, based upon other things which they bring to the class.
IMHO I don’t think you truly practice an art if you never compete in it. I don’t think I would really understand my limitations if I didn’t test myself against people from outside of my school, people who are not my friends, people whose training is not identical to mine. After practicing with the same students over a period of time, you learn their tendencies, and it can cause your training to fall into a rut. It can also give you a false sense of security.
I don’t want to be given belts for “service” to my art, I want to earn them the old-fashioned way. I want to know that the skills I am learning are useful against people who train elsewhere. The first time I competed against an outside student in Jiu-Jitsu, it was truly shocking. Nowhere in my training had I experienced anything like it, and it really opened my mind. There is no question that I have learned much more because of competition.
Of course, the true test would be if I ever have to use my knowledge in a real self-defense situation, but that is something I hope will never happen. Competition may not be the same as a street fight, but it’s the closest I am able to come. Learning to remain calm under stress is one of my biggest goals, and that certainly makes competing more beneficial to me than not competing.