Personally I try not to make judgement calls on any style or system until I have seen or experienced it first hand. I have met some great Kung Fu players and some bad ones. I think the argument concerning Kung Fu as compared to MMA is the fact that Kung Fu schools are not producing the fighters like MMA gyms do. It may be that they don't want to compete in that venue, it may be that they are form fairies who couldn't beat a five year old, it could be that they don't want to.
I live in a rural area with not a lot of martial arts schools so I can tell statistically there are three Kung Fu schools, one which is good and two that are pretty bad. There are also three MMA gyms and two boxing gyms, all of which produce fighters who compete. From a statistical stand point it comes down to production and what is seen by the general public. If you have a school that is competing and winning in MMA, and regardless of you like it or not it seems to be the standard by which all is judged, it will be viewed as a good school.
Personally if there is hard sparring and good training methods involved a school does not necissarly have to produce a lot of competitive (those who are always competiing) fighters, but it certainly helps in the eyes of those watching.
"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