Sparring without contact is pretty much useless and does nothing but build bad habits. You could argue that you are still learning footwork, body movement, muscle memory, those types of things, but sparring how those guys were gives people a false sense of what they can do.
Too often Kung Fu turns into this speed crazy slapfest such as this where the intent seems to be to throw as many strikes as possible to look blazing fast and cool. This is not the same as in boxing where you have punches in bunches that are fast but still powerful and with intent to hit each time, and that really is the difference.
Honestly sparring with no pads I just don't care for anymore. Even if you are going hard to body style (Kyokushin) pulling shots to the head builds bad habits. Granted when sparring with smaller MMA gloves and such you really cant power up and strike like you would a good boxing training glove, but solid contact is still where it is at. It still cracks me up at my gym when we spar hard we wear boxing gloves, head hear, ect and I still hear the traditonal guys say crap like big gloves take away real technique, or some other complete and utter horse sh**it and continue to do the kind of crap in this video.
"The hero and the coward both feel the same thing, but the hero projects his fear onto his opponent while the coward runs. 'Fear'. It's the same thing, but it's what you do with it that matters". -Cus D'Amato